8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15 (d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported) August 4, 2010

The Allstate Corporation

(Exact name of registrant as specified in charter)

Delaware	1-11840	36-3871531
(State or other	(Commission	(IRS Employer
jurisdiction of incorporation)	File Number)	Identification No.)

2775 Sanders Road, Northbrook, Illinois	60062
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code  (847) 402-5000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.below):

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Section 2. — Financial Information

Item 2.02.             Results of Operations and Financial Condition.

On August 4, 2010, the registrant issued a press release announcing its financial results for the second quarter of 2010, and the availability of the registrant’s second quarter investor supplement on the registrant’s web site.  The press release and the investor supplement are furnished as Exhibits 99.1 and 99.2 to this report.  The information contained in the press release and the investor supplement are furnished and not filed pursuant to instruction B.2 of Form 8-K.

Section 9. — Financial Statements and Exhibits

Item 9.01.              Financial Statements and Exhibits.

(d)  Exhibits

99.1Registrant’s press release dated August 4, 2010

99.2Second quarter 2010 Investor Supplement of The Allstate Corporation

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

	THE ALLSTATE CORPORATION
	(registrant)
	By	/s/ Samuel H. Pilch
	Name: Samuel H. Pilch
	Title: Controller
Dated: August 4, 2010

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EX-99.1

Exhibit 99.1

NEWS

FOR IMMEDIATE RELEASE

Contacts:
Maryellen Thielen	Robert Block, Christine Ieuter
Media Relations	Investor Relations
(847) 402-5600	(847) 402-2800

Allstate Second Quarter 2010 Results Reflect Positive Trends

NORTHBROOK, Ill., August 4, 2010 — The Allstate Corporation (NYSE: ALL) today reported financial results for the second quarter of 2010:

Consolidated Highlights

	Three months ended June 30,
($ in millions, except per share amounts and ratios)	2010		2009		% Change
Consolidated revenues	$	7,656	$	8,490	(9.8	)
Net income	145		389		(62.7	)
Net income per diluted share	0.27		0.72		(62.5	)
Operating income*	441		297		48.5
Operating income per diluted share*	0.81		0.55		47.3
Book value per share	33.24		27.87		19.3
Book value per share, excluding the impact of unrealized net capital gains and losses on fixed income securities*	32.51		31.55		3.0
Catastrophe losses	636		818		(22.2	)
Property-Liability combined ratio	96.8		100.0		(3.2) pts
Property-Liability combined ratio excluding the effect of catastrophes and prior year reserve reestimates (“underlying combined ratio”)*	88.1		87.2		0.9  pts

* Measures used in this release that are not based on accounting principles generally accepted in the United States of America (“non-GAAP”) are defined and reconciled to the most directly comparable GAAP measure and operating measures are defined in the “Definitions of Non-GAAP and Operating Measures” section of this document.

“We made continued progress in executing our strategies and achieving our 2010 goals in the second quarter,” said Thomas J. Wilson, chairman, president and chief executive officer of The Allstate Corporation.  “Profitability at Allstate Protection met our underlying combined ratio outlook for the year.  Implementation of growth initiatives reduced the impact of catastrophe risk management and profitability actions, but has not yet generated sufficient volume to increase overall policies in force. Allstate Financial’s operating income significantly rebounded reflecting progress on its strategic repositioning and the benefit of reserve actions.  Strong investment results reflect our risk mitigation and return optimization strategies.

“Operating income was $0.81 per diluted share for the quarter compared to $0.55 per diluted share for the same quarter last year due to a decline in catastrophe losses from a record second quarter level in 2009. Net income was $0.27 per diluted share as derivative losses reduced earnings.  Derivative losses, however, were more than offset by corresponding increases in investment valuations so that book value per share increased by 3% in the quarter,” said Wilson.

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Consolidated Financial Results

Allstate’s second quarter 2010 operating income rose to $441 million compared to $297 million in the same period of 2009, reflecting improved results in both Property-Liability and Allstate Financial.  Net income was $145 million in the second quarter of 2010 compared to $389 million in the second quarter of 2009 primarily due to realized capital losses in the 2010 quarter versus realized capital gains in the prior year period.  Realized capital losses in the second quarter of 2010 reflect risk management actions, including derivative losses that were offset by increased portfolio valuations.  Book value rose to $33.24 per share at June 30, 2010 compared to $32.26 at March 31, 2010 and $27.87 at June 30, 2009, reflecting higher shareholders’ equity primarily resulting from increased market valuations for fixed income investments.

Property-Liability Combined Ratio Reflects Continued Strong Auto Performance

Property-Liability results for the second quarter of 2010 reflect Allstate Protection’s implementation of actions to profitably grow standard auto and improve homeowners returns.  Property-Liability premiums written increased 0.4% in the second quarter of 2010 compared to the prior year second quarter.  Allstate brand growth of 1.6% contributed to the premium increase, partially offset by a 20.4% Encompass brand decline when compared to the second quarter a year ago.  Actions to improve Encompass profitability negatively impacted results.

Allstate’s Property-Liability business produced an underlying combined ratio within the company’s full-year outlook range of 88 to 90.  The underlying combined ratio, which excludes catastrophes and prior year reserve reestimates, was 88.1 in the second quarter of 2010 compared to 87.2 in the same period of 2009, primarily due to a higher expense ratio.  The recorded combined ratio was 96.8 for the second quarter of 2010, a 3.2 point improvement from the second quarter of 2009.

Catastrophe losses totaled $636 million during the second quarter of 2010, reflecting 30 events with losses of $758 million, offset by favorable reserve reestimates of $39 million on first quarter 2010 events and $83 million on prior years’ events.  This compares to catastrophe losses of $818 million for the second quarter of 2009.  Catastrophe losses added 9.8 points to the combined ratio during the second quarter of 2010.  Although lower than the record second quarter impact in 2009 of 12.5 points, it was 3.2 points higher than Allstate’s 19-year average for a second quarter of 6.6 points.

Allstate brand standard auto premiums written* increased 1.9% for the second quarter of 2010 compared to the prior year second quarter, due to a 3.3% increase in average premium.  Increased average premium was offset by a 1.7% decline in policies in force as the rate of new business was not sufficient to overcome the business lost at renewal.  Standard auto retention was comparable to the prior year second quarter at 89.0 despite a slight decline in Allstate’s customer loyalty index score during the quarter.  New issued applications increased 0.4% compared to the prior year second quarter.  The Allstate brand standard auto combined ratio was 94.5, a decline of 0.4 points from the second quarter of 2009, due to growth in earned premiums as well as favorable prior year reserve reestimates.

Allstate brand homeowners premiums written for the second quarter of 2010 increased 2.2% compared to the same period a year ago, as a 6.1% increase in average premium was partly offset by a 4.0% decline in policies in force.  The combined ratio was 104.4 in the second quarter of 2010 compared to 116.3 in the second quarter a year ago, reflecting lower catastrophe losses and lower non-catastrophe claim costs.  Rate increases averaging 11.3% in 14 states were approved during the second quarter, reflecting actions to improve returns and lessen the volatility of the homeowners results.

Allstate Financial Strategy Gaining Traction

Allstate Financial made significant progress on reinventing its business model during the second quarter.  The goals are to produce higher returns, reduce concentrations in products with returns dependent on investment spread, and serve Allstate customers by focusing on Allstate agencies and expanding Allstate Workplace Division.

Premiums and deposits* on mortality and morbidity (underwritten) products increased 12.1% when compared to the second quarter of 2009, including increases in policies sold through the Allstate Workplace Division and

2

Allstate agencies.  Consistent with the strategy, premiums and deposits on fixed annuity sales declined by 60.2% compared to the prior year period.

Allstate Financial operating income was $125 million in the second quarter of 2010 compared to $65 million in the prior year second quarter.  The increase was due to lower amortization of deferred acquisition costs (DAC) and a higher investment spread, partly offset by a lower benefit spread.  DAC amortization declined primarily due to a re-estimation of reserves and lower amortization on annuities.  The investment spread increased to $134 million in the second quarter of 2010 from $63 million in the prior year second quarter.  The change was due to lower net investment income being more than offset by decreased interest credited to contractholder funds, which includes lower amortization of deferred sales inducements.  The benefit spread declined 24.4% from the prior year second quarter due to the re-estimation of reserves and adverse mortality experience, partly offset by growth in accident and health products.  The re-estimation of reserves related to the use of refined policy level information and assumptions for interest-sensitive life insurance and immediate annuities, resulting in a net reserve increase of $27 million, after-tax, and a decrease in DAC amortization of $32 million, after-tax, for a net favorable impact to operating income of $5 million, after-tax.

Allstate Financial reported a net loss of $107 million in the second quarter of 2010 compared to net income of $19 million in the 2009 second quarter.  The second quarter of 2010 net loss reflected $226 million of after-tax realized capital losses including the impact of related deferred acquisition costs and deferred sales inducements.  The second quarter of 2009 reflected an after-tax realized capital loss of $49 million, including the impact of deferred acquisition costs and deferred sales inducements.

Proactive Investment Strategies Provide Returns

Allstate’s consolidated investment portfolio was $99.9 billion at June 30, 2010, slightly lower than at March 31, 2010, as improved valuations and operating cash flows were offset by reductions in Allstate Financial’s spread-based business.  Valuation increases were primarily driven by the effect of declining interest rates on fixed income securities, and resulted in an improvement of $1.2 billion in the net unrealized position during the second quarter.  Allstate’s net unrealized gain at June 30, 2010 was $400 million, pre-tax, compared to a net unrealized loss of $849 million, pre-tax, at March 31, 2010 and a net unrealized loss of $7.3 billion, pre-tax, at June 30, 2009.

Net realized capital loss for the second quarter of 2010 was $451 million, pre-tax, compared to a net realized capital gain of $328 million in the prior year second quarter, with derivatives being responsible for the majority of the $779 million difference.  Derivative net losses totaled $310 million in the second quarter of 2010 compared to a gain of $419 million in the second quarter of 2009, driven primarily by Allstate’s risk management actions.  Net realized capital loss for the second quarter of 2010 also reflected $239 million of impairment write-downs and $67 million of intent write-downs primarily related to residential and commercial real estate exposure, partly offset by net realized gains of $145 million from sales.

Derivative net losses were the result of interest rate and equity market declines.  Declining interest rates resulted in $259 million of losses from Allstate’s risk management actions.  However, the loss was less than the increase in fixed income valuations during the period.  Declining equity markets resulted in derivative losses of $106 million from equity exposures embedded in fixed income securities, partly offset by $82 million in gains from equity market hedges.

As part of the company’s ongoing strategy to manage exposure to certain portfolio segments, reductions of municipal fixed income securities totaled $1.6 billion of amortized cost and commercial real estate totaled $966 million of amortized cost during the second quarter of 2010.  In addition, a lower allocation to equity securities was maintained while the market experienced a significant downturn in the quarter.

Net investment income for the second quarter of 2010 was $1.0 billion, 5.3% less than the second quarter of 2009 and consistent with the first quarter of 2010.  The decline from the prior year second quarter primarily resulted from lower short-term interest rates, risk reduction actions related to municipal bonds and commercial real estate, and duration-shortening actions taken to protect the portfolio from rising interest rates.  Net investment income in the Property-Liability portfolio totaled $310 million in the second quarter of 2010, a 7.2% decline from the second quarter of 2009, but a 2.0% increase from the first quarter of 2010.  Allstate Financial’s net investment income was $723 million, a 5.4% decline from the second quarter of 2009 and a 1.1% decline from the first quarter of 2010.

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Strong Capital Position

“The combination of our proactive strategies and favorable investment results improved book value,” said Don Civgin, senior vice president and chief financial officer.

Book value per share grew to $33.24 at June 30, 2010 compared to $32.26 at March 31, 2010 and $27.87 at June 30, 2009.  The book value increases reflected higher shareholders’ equity, primarily resulting from improved investment valuations.  Statutory surplus at June 30, 2010 was an estimated $14.9 billion for Allstate Insurance Company, including $3.2 billion at Allstate Life Insurance Company.  This compares to statutory surplus of $15.4 billion for Allstate Insurance Company at March 31, 2010 and $13.8 billion at June 30, 2009.  The statutory surplus reduction from March 31, 2010 to June 30, 2010 includes a $200 million dividend from Allstate Insurance Company to the holding company.  A total of $3.1 billion in deployable assets were available at the holding company level at June 30, 2010.

*     *     *     *     *

Visit www.allstateinvestors.com to view additional information about Allstate’s second quarter results, including a webcast of its quarterly conference call.  The conference call will be held at 9 a.m. ET on Thursday, August 5, 2010.

The Allstate Corporation (NYSE: ALL) is the nation’s largest publicly held personal lines insurer.  Widely known through the “You’re In Good Hands With Allstate®” slogan, Allstate is reinventing protection and retirement to help more than 17 million households insure what they have today and better prepare for tomorrow.  Consumers access Allstate insurance products (auto, home, life and retirement) and services through Allstate agencies, independent agencies, and Allstate exclusive financial representatives in the U.S. and Canada, as well as via www.allstate.com and 1-800 Allstate®.

4

THE ALLSTATE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

($ in millions, except per share data)	Three months endedJune 30,						Six months endedJune 30,
	2010			2009			2010			2009
	(unaudited)						(unaudited)
Revenues
Property-liability insurance premiums	$	6,513		$	6,560		$	13,016		$	13,142
Life and annuity premiums and contract charges	545			494			1,089			978
Net investment income	1,049			1,108			2,099			2,284
Realized capital gains and losses:
Total other-than-temporary impairment losses	(288		)	(471		)	(538		)	(1,196		)
Portion of loss recognized in other comprehensive income	(18		)	154			(23		)	154
Net other-than-temporary impairment losses recognized in earnings	(306		)	(317		)	(561		)	(1,042		)
Sales and other realized capital gains and losses	(145		)	645			(238		)	1,011
Total realized capital gains and losses	(451		)	328			(799		)	(31		)
	7,656			8,490			15,405			16,373
Costs and expenses
Property-liability insurance claims and claims expense	4,714			5,002			9,506			9,722
Life and annuity contract benefits	485			407			927			794
Interest credited to contractholder funds	450			561			913			1,140
Amortization of deferred policy acquisition costs	949			1,229			1,963			2,626
Operating costs and expenses	789			702			1,618			1,503
Restructuring and related charges	13			32			24			77
Interest expense	92			97			184			185
	7,492			8,030			15,135			16,047
Gain on disposition of operations	2			1			3			4
Income from operations before income tax expense	166			461			273			330
Income tax expense	21			72			8			215
Net income	$	145		$	389		$	265		$	115
Earnings per share:
Net income per share - Basic	$	0.27		$	0.72		$	0.49		$	0.21
Weighted average shares - Basic	540.7			539.8			540.4			539.3
Net income per share - Diluted	$	0.27		$	0.72		$	0.49		$	0.21
Weighted average shares - Diluted	543.0			540.6			542.4			540.1
Cash dividends declared per share	$	0.20		$	0.20		$	0.40		$	0.40

5

THE ALLSTATE CORPORATION

SEGMENT RESULTS

($ in millions, except ratios)	Three months ended						Six months ended
	June 30,						June 30,
	2010			2009			2010			2009
Property-Liability
Premiums written	$	6,640		$	6,615		$	12,898		$	12,884
Premiums earned	$	6,513		$	6,560		$	13,016		$	13,142
Claims and claims expense	(4,714		)	(5,002		)	(9,506		)	(9,722		)
Amortization of deferred policy acquisition costs	(914		)	(940		)	(1,839		)	(1,889		)
Operating costs and expenses	(664		)	(591		)	(1,368		)	(1,269		)
Restructuring and related charges	(14		)	(30		)	(25		)	(57		)
Underwriting income (loss)	207			(3		)	278			205
Net investment income	310			334			614			678
Periodic settlements and accruals on non-hedge derivative instruments	(1		)	(3		)	(2		)	(6		)
Income tax expense on operations	(148		)	(39		)	(236		)	(174		)
Operating income	368			289			654			703
Realized capital gains and losses, after-tax	(69		)	131			(192		)	(185		)
Reclassification of periodic settlements and accruals on non-hedge derivative instruments, after-tax	—			2			1			4
Net income	$	299		$	422		$	463		$	522
Catastrophe losses	$	636		$	818		$	1,284		$	1,334
Operating ratios:
Claims and claims expense ratio	72.4			76.2			73.1			74.0
Expense ratio	24.4			23.8			24.8			24.4
Combined ratio	96.8			100.0			97.9			98.4
Effect of catastrophe losses on combined ratio	9.8			12.5			9.9			10.2
Effect of prior year reserve reestimates on combined ratio	(2.3		)	0.3			(1.3		)	(0.3		)
Effect of catastrophe losses included in prior year reserve reestimates on combined ratio	(1.2		)	—			(0.7		)	(0.4		)
Effect of Discontinued Lines and Coverages on combined ratio	—			—			0.1			—
Allstate Financial
Investments	$	61,804		$	59,861		$	61,804		$	59,861
Premiums and deposits	$	1,018		$	1,399		$	2,123		$	2,932
Premiums and contract charges	$	545		$	494		$	1,089		$	978
Net investment income	723			764			1,454			1,583
Periodic settlements and accruals on non-hedge derivative instruments	11			(3		)	28			(2		)
Contract benefits	(485		)	(407		)	(927		)	(794		)
Interest credited to contractholder funds	(450		)	(520		)	(913		)	(1,062		)
Amortization of deferred policy acquisition costs	(41		)	(130		)	(99		)	(239		)
Operating costs and expenses	(116		)	(105		)	(236		)	(226		)
Restructuring and related charges	1			(2		)	1			(20		)
Income tax expense on operations	(63		)	(26		)	(133		)	(68		)
Operating income	125			65			264			150
Realized capital gains and losses, after-tax	(230		)	82			(335		)	(88		)
DAC and DSI accretion (amortization) relating to realized capital gains and losses, after-tax	4			(131		)	2			(150		)
DAC and DSI unlocking relating to realized capital gains and losses, after-tax	—			—			(18		)	(224		)
Reclassification of periodic settlements and accruals on non-hedge derivative instruments, after-tax	(7		)	2			(18		)	1
Gain on disposition of operations, after-tax	1			1			2			3
Net (loss) income	$	(107	)	$	19		$	(103	)	$	(308	)
Corporate and Other
Net investment income	$	16		$	10		$	31		$	23
Operating costs and expenses	(101		)	(103		)	(198		)	(193		)
Income tax benefit on operations	33			36			65			68
Operating loss	(52		)	(57		)	(102		)	(102		)
Realized capital gains and losses, after-tax	5			5			7			3
Net loss	$	(47	)	$	(52	)	$	(95	)	$	(99	)
Consolidated net income	$	145		$	389		$	265		$	115

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THE ALLSTATE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

($ in millions, except par value data)	June 30,			December 31,
	2010			2009
	(unaudited)
Assets
Investments:
Fixed income securities, at fair value (amortized cost $81,425 and $81,243)	$	81,925		$	78,766
Equity securities, at fair value (cost $3,356 and $4,845)	3,254			5,024
Mortgage loans	7,173			7,935
Limited partnership interests	3,119			2,744
Short-term, at fair value (amortized cost $2,414 and $3,056)	2,414			3,056
Other	2,058			2,308
Total investments	99,943			99,833
Cash	711			612
Premium installment receivables, net	4,830			4,839
Deferred policy acquisition costs	5,003			5,470
Reinsurance recoverables, net	6,537			6,355
Accrued investment income	851			864
Deferred income taxes	1,301			1,870
Property and equipment, net	935			990
Goodwill	874			875
Other assets	1,822			1,872
Separate Accounts	8,003			9,072
Total assets	$	130,810		$	132,652
Liabilities
Reserve for property-liability insurance claims and claims expense	$	19,434		$	19,167
Reserve for life-contingent contract benefits	13,483			12,910
Contractholder funds	49,443			52,582
Unearned premiums	9,684			9,822
Claim payments outstanding	733			742
Other liabilities and accrued expenses	6,054			5,726
Long-term debt	5,909			5,910
Separate Accounts	8,003			9,072
Total liabilities	112,743			115,931
Equity
Preferred stock, $1 par value, 25 million shares authorized, none issued	—			—
Common stock, $.01 par value, 2.0 billion shares authorized and 900 million issued, 538 million and 537 million shares outstanding	9			9
Additional capital paid-in	3,155			3,172
Retained income	31,552			31,492
Deferred ESOP expense	(44		)	(47		)
Treasury stock, at cost (362 million and 363 million shares)	(15,760		)	(15,828		)
Accumulated other comprehensive income:
Unrealized net capital gains and losses:
Unrealized net capital losses on fixed income securities with OTTI	(332		)	(441		)
Other unrealized net capital gains and losses	588			(1,072		)
Unrealized adjustment to DAC, DSI and insurance reserves	72			643
Total unrealized net capital gains and losses	328			(870		)
Unrealized foreign currency translation adjustments	43			46
Unrecognized pension and other postretirement benefit cost	(1,244		)	(1,282		)
Total accumulated other comprehensive loss	(873		)	(2,106		)
Total shareholders’ equity	18,039			16,692
Noncontrolling interest	28			29
Total equity	18,067			16,721
Total liabilities and equity	$	130,810		$	132,652

7

THE ALLSTATE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

($ in millions)	Six months ended June 30,
	2010			2009
	(unaudited)
Cash flows from operating activities
Net income	$	265		$	115
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and other non-cash items	26			(86		)
Realized capital gains and losses	799			31
Gain on disposition of operations	(3		)	(4		)
Interest credited to contractholder funds	913			1,140
Changes in:
Policy benefits and other insurance reserves	306			(148		)
Unearned premiums	(135		)	(283		)
Deferred policy acquisition costs	(70		)	548
Premium installment receivables, net	9			55
Reinsurance recoverables, net	(206		)	(133		)
Income taxes	74			1,359
Other operating assets and liabilities	116			(112		)
Net cash provided by operating activities	2,094			2,482
Cash flows from investing activities
Proceeds from sales:
Fixed income securities	9,114			8,856
Equity securities	3,046			3,547
Limited partnership interests	278			214
Mortgage loans	44			141
Other investments	62			262
Investment collections:
Fixed income securities	2,391			2,658
Mortgage loans	638			598
Other investments	44			65
Investment purchases:
Fixed income securities	(11,900		)	(12,424		)
Equity securities	(1,501		)	(4,207		)
Limited partnership interests	(616		)	(268		)
Mortgage loans	(10		)	(14		)
Other investments	(79		)	(41		)
Change in short-term investments, net	439			3,167
Change in other investments, net	(128		)	(80		)
Disposition of operations	—			12
Purchases of property and equipment, net	(69		)	(104		)
Net cash provided by investing activities	1,753			2,382
Cash flows from financing activities
Proceeds from issuance of long-term debt	—			1,000
Repayment of long-term debt	(1		)	(1		)
Contractholder fund deposits	1,567			2,450
Contractholder fund withdrawals	(5,112		)	(7,736		)
Dividends paid	(215		)	(327		)
Treasury stock purchases	(5		)	(3		)
Shares reissued under equity incentive plans, net	25			—
Excess tax benefits on share-based payment arrangements	(4		)	(6		)
Other	(3		)	11
Net cash used in financing activities	(3,748		)	(4,612		)
Net increase in cash	99			252
Cash at beginning of period	612			415
Cash at end of period	$	711		$	667

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Definitions of Non-GAAP and Operating Measures

We believe that investors’ understanding of Allstate’s performance is enhanced by our disclosure of the following non-GAAP and operating financial 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 (loss), excluding:

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

·amortization of DAC and DSI, to the extent they resulted from the recognition of certain realized capital gains and losses,

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

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

Net income (loss) is the GAAP measure that is most directly comparable to operating income.

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, gain (loss) on disposition of operations and adjustments for other significant non-recurring, infrequent or unusual items.  Realized capital gains and losses 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.  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 (loss) to assess our performance.  We use adjusted measures of operating income and operating income per diluted share in incentive compensation.  Therefore, we believe it is useful for investors to evaluate net income (loss), 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 (loss) and does not reflect the overall profitability of our business.

The following tables reconcile operating income and net income (loss) for the three months and six months ended June 30, 2010 and 2009.

For the three months ended June 30,	Property-Liability						Allstate Financial						Consolidated						Per diluted share
($ in millions, except per share data)	2010			2009			2010			2009			2010			2009			2010			2009
Operating income	$	368		$	289		$	125		$	65		$	441		$	297		$	0.81		$	0.55
Realized capital gains and losses	(106		)	201			(353		)	121			(451		)	328
Income tax benefit (expense)	37			(70		)	123			(39		)	157			(110		)
Realized capital gains and losses, after-tax	(69		)	131			(230		)	82			(294		)	218			(0.53		)	0.40
DAC and DSI accretion (amortization) relating to realized capital gains and losses, after-tax	—			—			4			(131		)	4			(131		)	—			(0.24		)
DAC and DSI unlocking relating to realized capital gains and losses, after-tax	—			—			—			—			—			—			—			—
Reclassification of periodic settlements and accruals on non-hedge derivative instruments, after-tax	—			2			(7		)	2			(7		)	4			(0.01		)	0.01
Gain on disposition of operations, after-tax	—			—			1			1			1			1			—			—
Net income (loss)	$	299		$	422		$	(107	)	$	19		$	145		$	389		$	0.27		$	0.72

9

For the six months ended June 30,	Property-Liability						Allstate Financial						Consolidated						Per diluted share
($ in millions, except per share data)	2010			2009			2010			2009			2010			2009			2010			2009
Operating income	$	654		$	703		$	264		$	150		$	816		$	751		$	1.50		$	1.39
Realized capital gains and losses	(296		)	(113		)	(515		)	78			(799		)	(31		)
Income tax benefit (expense)	104			(72		)	180			(166		)	279			(239		)
Realized capital gains and losses, after-tax	(192		)	(185		)	(335		)	(88		)	(520		)	(270		)	(0.95		)	(0.50		)
DAC and DSI accretion (amortization) relating to realized capital gains and losses, after-tax	—			—			2			(150		)	2			(150		)	—			(0.28		)
DAC and DSI unlocking relating to realized capital gains and losses, after-tax	—			—			(18		)	(224		)	(18		)	(224		)	(0.03		)	(0.42		)
Reclassification of periodic settlements and accruals on non-hedge derivative instruments, after-tax	1			4			(18		)	1			(17		)	5			(0.03		)	0.01
Gain on disposition of operations, after-tax	—			—			2			3			2			3			—			0.01
Net income (loss)	$	463		$	522		$	(103	)	$	(308	)	$	265		$	115		$	0.49		$	0.21

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

Combined ratio excluding the effect of catastrophes and prior year reserve reestimates (“underlying combined ratio”) is a non-GAAP ratio, which is computed as the difference between three GAAP operating ratios: the combined ratio, the effect of catastrophes on the combined ratio and the effect of prior year non-catastrophe reserve reestimates 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 and prior year reserve reestimates.  These catastrophe losses cause our loss trends to vary significantly between periods as a result of their incidence of occurrence and magnitude, and can have a significant impact on the combined ratio.  Prior year reserve reestimates are caused by unexpected loss development on historical reserves.  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 2010 combined ratio excluding the effect of catastrophe losses and prior year reserve reestimates.  The combined ratio excluding the effect of catastrophes and prior year reserve reestimates should not be considered a substitute for the combined ratio and does not reflect the overall underwriting profitability of our business.  A reconciliation of the combined ratio excluding the effect of catastrophes and prior year reserve reestimates to the combined ratio is provided in the following table.

	Three months ended June 30,			Six months ended June 30,
	2010		2009	2010		2009
Combined ratio excluding the effect of catastrophes and prior year reserve reestimates (“underlying combined ratio”)	88.1		87.2	88.6		88.1
Effect of catastrophe losses	9.8		12.5	9.9		10.2
Effect of prior year non-catastrophe reserve reestimates	(1.1	)	0.3	(0.6	)	0.1
Combined ratio	96.8		100.0	97.9		98.4
Effect of prior year catastrophe reserve reestimates	(1.2	)	—	(0.7	)	(0.4	)

In this news release, we provide our outlook range on the 2010 combined ratio excluding the effect of catastrophe losses and prior year reserve reestimates.  A reconciliation of this measure to the combined ratio is not possible on a forward-looking basis because it is not possible to provide a reliable forecast of catastrophes.  Future prior year reserve reestimates are expected to be zero because reserves are determined based on our best estimate of ultimate loss reserves as of the reporting date.

Book value per share, excluding the impact of unrealized net capital gains and losses on fixed income securities, is a ratio that uses a non-GAAP measure.  It is calculated by dividing shareholders’ equity after excluding the impact of unrealized net capital gains and losses on fixed income securities and related DAC, DSI and life insurance reserves by total shares outstanding plus dilutive potential shares outstanding.  Book value per share is the most directly comparable GAAP measure.

We use the trend in book value per share, excluding the impact of unrealized net capital gains and losses on fixed income securities, in conjunction with book value per share to identify and analyze the change in net worth attributable to management efforts between periods.  We believe the non-GAAP ratio is useful to investors because it eliminates the effect of items that can fluctuate significantly from period to period and are generally driven by economic developments, primarily capital market conditions, the magnitude and timing of which are generally not influenced by management, and we believe it enhances understanding and comparability of performance by highlighting underlying business activity and profitability drivers.  We note that book value per share, excluding the impact of unrealized net capital gains and losses on fixed income securities, is a measure commonly used by insurance investors as a valuation technique.

10

Book value per share, excluding the impact of unrealized net capital gains and losses on fixed income securities, should not be considered as a substitute for book value per share, and does not reflect the recorded net worth of our business.  The following table shows the reconciliation.

($ in millions, except per share data)	As of June 30,
	2010		2009
Book value per share
Numerator:
Shareholders’ equity	$	18,039	$	15,068
Denominator:
Shares outstanding and dilutive potential shares outstanding	542.7		540.6
Book value per share	$	33.24	$	27.87
Book value per share, excluding the impact of unrealized net capital gains and losses on fixed income securities
Numerator:
Shareholders’ equity	$	18,039	$	15,068
Unrealized net capital gains and losses on fixed income securities	398		(1,988		)
Adjusted shareholders’ equity	$	17,641	$	17,056
Denominator:
Shares outstanding and dilutive potential shares outstanding	542.7		540.6
Book value per share, excluding the impact of unrealized net capital gains and losses on fixed income securities	$	32.51	$	31.55

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

($ in millions)	Three months ended June 30,						Six months ended June 30,
	2010			2009			2010			2009
Premiums written	$	6,640		$	6,615		$	12,898		$	12,884
(Increase) decrease in Property-Liability unearned premiums	(110		)	(70		)	135			267
Other	(17		)	15			(17		)	(9		)
Premiums earned	$	6,513		$	6,560		$	13,016		$	13,142

Premiums and deposits is an operating measure that we use to analyze production trends for Allstate Financial sales.  It includes premiums on insurance policies and annuities and all deposits and other funds received from customers on deposit-type products including the net new deposits of Allstate Bank, which we account for under GAAP as increases to liabilities rather than as revenue.

The following table illustrates where premiums and deposits are reflected in the condensed consolidated financial statements.

($ in millions)	Three months ended June 30,						Six months ended June 30,
	2010			2009			2010			2009
Total premiums and deposits	$	1,018		$	1,399		$	2,123		$	2,932
Deposits to contractholder funds	(739		)	(1,152		)	(1,567		)	(2,450		)
Deposits to separate accounts	(25		)	(28		)	(51		)	(56		)
Change in unearned premiums and other adjustments	32			29			70			68
Life and annuity premiums (1)	$	286		$	248		$	575		$	494

(1) Life and annuity contract charges in the amount of $259 million and $246 million for the three months ended June 30, 2010 and 2009, respectively, and $514 million and $484 million for the six months ended June 30, 2010 and 2009, respectively, which are also revenues recognized for GAAP, have been excluded from the table above, but are a component of the Condensed Consolidated Statements of Operations line item life and annuity premiums and contract charges.

Forward-Looking Statements and Risk Factors

This news release contains forward-looking statements about our outlook for the combined ratio excluding the effect of catastrophes and prior year reserve reestimates for 2010.  These statements are subject to the Private Securities Litigation Reform Act of 1995 and are based on management’s estimates, assumptions and projections.  Actual results may differ materially from those projected based on the risk factors described below.

·Premiums written and premiums earned, the denominator of the underlying combined ratio, may be materially less than projected.  Policyholder attrition may be greater than anticipated resulting in a lower amount of insurance in force.

·Unanticipated increases in the severity or frequency of standard auto insurance claims may adversely affect our underwriting results.  Changes in the severity or frequency of claims may affect the profitability of our Allstate Protection segment.  Changes in

11

bodily injury claim severity are driven primarily by inflation in the medical sector of the economy and litigation.  Changes in auto physical damage claim severity are driven primarily by inflation in auto repair costs, auto parts prices and used car prices.  The short-term level of claim frequency we experience may vary from period to period and may not be sustainable over the longer term.  A decline in gas prices, increase in miles driven, and higher unemployment are examples of factors leading to a short-term frequency change.  A significant long-term increase in claim frequency could have an adverse effect on our underwriting results.

We undertake no obligation to publicly correct or update any forward-looking statements.  This news release contains unaudited financial information.

# # # # #

12

EX-99.2

Exhibit 99.2

THE ALLSTATE CORPORATION

Investor Supplement

Second Quarter 2010

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

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

THE ALLSTATE CORPORATION

Investor Supplement - Second Quarter 2010

Table of Contents

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

THE ALLSTATE CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

($ in millions, except per share data)

	Three months ended																				Six months ended
			June 30,			March 31,			Dec. 31,			Sept. 30,			June 30,			March 31,			June 30,			June 30,
			2010			2010			2009			2009			2009			2009 (1)			2010			2009
Revenues
Property-liability insurance premiums		$	6,513		$	6,503		$	6,517		$	6,535		$	6,560		$	6,582		$	13,016		$	13,142
Life and annuity premiums and contract charges			545			544			498			482			494			484			1,089			978
Net investment income			1,049			1,050			1,076			1,084			1,108			1,176			2,099			2,284
Realized capital gains and losses:
Total other-than-temporary impairment losses			(288	)		(250	)		(641	)		(539	)		(471	)		(725	)		(538	)		(1,196	)
Portion of loss recognized in other comprehensive income			(18	)		(5	)		156			147			154			-			(23	)		154
Net other-than-temporary impairment losses recognized in earnings			(306	)		(255	)		(485	)		(392	)		(317	)		(725	)		(561	)		(1,042	)
Sales and other realized capital gains and losses			(145	)		(93	)		452			(127	)		645			366			(238	)		1,011
Total realized capital gains and losses			(451	)		(348	)		(33	)		(519	)		328			(359	)		(799	)		(31	)
Total revenues			7,656			7,749			8,058			7,582			8,490			7,883			15,405			16,373
Costs and expenses
Property-liability insurance claims and claims expense			4,714			4,792			4,451			4,573			5,002			4,720			9,506			9,722
Life and annuity contract benefits			485			442			441			382			407			387			927			794
Interest credited to contractholder funds			450			463			490			496			561			579			913			1,140
Amortization of deferred policy acquisition costs			949			1,014			1,105			1,023			1,229			1,397			1,963			2,626
Operating costs and expenses			789			829			760			744			702			801			1,618			1,503
Restructuring and related charges			13			11			18			35			32			45			24			77
Interest expense			92			92			101			106			97			88			184			185
Total costs and expenses			7,492			7,643			7,366			7,359			8,030			8,017			15,135			16,047
Gain on disposition of operations			2			1			1			2			1			3			3			4
Income (loss) from operations before income tax expense (benefit)			166			107			693			225			461			(131	)		273			330
Income tax expense (benefit)			21			(13	)		175			4			72			143			8			215
Net income (loss)		$	145		$	120		$	518		$	221		$	389		$	(274	)	$	265		$	115
Earnings per share: (2)
Net income (loss) per share - Basic		$	0.27		$	0.22		$	0.96		$	0.41		$	0.72		$	(0.51	)	$	0.49		$	0.21
Weighted average shares - Basic			540.7			540.5			539.9			539.9			539.8			538.9			540.4			539.3
Net income (loss) per share - Diluted		$	0.27		$	0.22		$	0.96		$	0.41		$	0.72		$	(0.51	)	$	0.49		$	0.21
Weighted average shares - Diluted			543.0			541.8			542.1			541.5			540.6			538.9			542.4			540.1
Cash dividends declared per share		$	0.20		$	0.20		$	0.20		$	0.20		$	0.20		$	0.20		$	0.40		$	0.40

(1)Income tax expense for the three months ended March 31, 2009 includes expense of $254 million attributable to an increase in the valuation allowance relating to the deferred tax asset on capital losses recorded in the first quarter of 2009.  This valuation allowance was released in connection with the adoption of new OTTI accounting guidance on April 1, 2009; however, the release was recorded as an increase to retained income and therefore did not reverse the amount recorded in income tax expense. 

(2)As a result of the net loss for the three months ended March 31, 2009, weighted average dilutive potential common shares outstanding resulting from stock options of 0.6 million were not included in the computation of diluted earnings per share since inclusion of these securities would have an anti-dilutive effect.  Accordingly, the sum of our income (loss) per share amounts for the quarters of 2009 may not equal the year-to-date per share amount.

1

THE ALLSTATE CORPORATION

CONTRIBUTION TO INCOME

($ in millions, except per share data)

	Three months ended																				Six months ended
			June 30,			March 31,			Dec. 31,			Sept. 30,			June 30,			March 31,			June 30,			June 30,
			2010			2010			2009			2009			2009			2009			2010			2009
Contribution to income
Operating income before the impact of restructuring and related charges		$	450		$	382		$	604		$	561		$	318		$	483		$	832		$	801
Restructuring and related charges, after-tax			(9	)		(7	)		(12	)		(23	)		(21	)		(29	)		(16	)		(50	)
Operating income *			441			375			592			538			297			454			816			751
Realized capital gains and losses, after-tax			(294	)		(226	)		(22	)		(336	)		218			(488	)		(520	)		(270	)
DAC and DSI accretion (amortization) relating to realized capital gains and losses, after-tax			4			(2	)		(45	)		18			(131	)		(19	)		2			(150	)
DAC and DSI unlocking relating to realized capital gains and losses, after-tax			-			(18	)		-			-			-			(224	)		(18	)		(224	)
Reclassification of periodic settlements and accruals on non-hedge derivative instruments, after-tax			(7	)		(10	)		(7	)		-			4			1			(17	)		5
Gain on disposition of operations, after-tax			1			1			-			1			1			2			2			3
Net income (loss)		$	145		$	120		$	518		$	221		$	389		$	(274	)	$	265		$	115
Income per share - Diluted(1)
Operating income before the impact of restructuring and related charges		$	0.83		$	0.70		$	1.11		$	1.04		$	0.59		$	0.90		$	1.53		$	1.48
Restructuring and related charges, after-tax			(0.02	)		(0.01	)		(0.02	)		(0.05	)		(0.04	)		(0.06	)		(0.03	)		(0.09	)
Operating income			0.81			0.69			1.09			0.99			0.55			0.84			1.50			1.39
Realized capital gains and losses, after-tax			(0.53	)		(0.42	)		(0.04	)		(0.62	)		0.40			(0.90	)		(0.95	)		(0.50	)
DAC and DSI accretion (amortization) relating to realized capital gains and losses, after-tax			-			-			(0.08	)		0.04			(0.24	)		(0.03	)		-			(0.28	)
DAC and DSI unlocking relating to realized capital gains and losses, after-tax			-			(0.03	)		-			-			-			(0.42	)		(0.03	)		(0.42	)
Reclassification of periodic settlements and accruals on non-hedge derivative instruments, after-tax			(0.01	)		(0.02	)		(0.01	)		-			0.01			-			(0.03	)		0.01
Gain on disposition of operations, after-tax			-			-			-			-			-			-			-			0.01
Net income (loss)		$	0.27		$	0.22		$	0.96		$	0.41		$	0.72		$	(0.51	)	$	0.49		$	0.21
Weighted average shares - Diluted			543.0			541.8			542.1			541.5			540.6			538.9			542.4			540.1

(1)As a result of the net loss for the three months ended March 31, 2009, weighted average dilutive potential common shares outstanding resulting from stock options of 0.6 million were not included in the computation of diluted earnings per share since inclusion of these securities would have an anti-dilutive effect. Accordingly, the sum of our income (loss) per share amounts for the quarters of 2009 may not equal the year-to-date per share amount.

2

THE ALLSTATE CORPORATION

REVENUES

($ in millions)

	Three months ended																				Six months ended
			June 30,			March 31,			Dec. 31,			Sept. 30,			June 30,			March 31,			June 30,			June 30,
			2010			2010			2009			2009			2009			2009			2010			2009
Property-Liability
Property-liability insurance premiums		$	6,513		$	6,503		$	6,517		$	6,535		$	6,560		$	6,582		$	13,016		$	13,142
Net investment income			310			304			324			326			334			344			614			678
Realized capital gains and losses			(106	)		(190	)		235			(290	)		201			(314	)		(296	)		(113	)
Total Property-Liability revenues			6,717			6,617			7,076			6,571			7,095			6,612			13,334			13,707
Allstate Financial
Life and annuity premiums and contract charges			545			544			498			482			494			484			1,089			978
Net investment income			723			731			737			744			764			819			1,454			1,583
Realized capital gains and losses			(353	)		(162	)		(275	)		(234	)		121			(43	)		(515	)		78
Total Allstate Financial revenues			915			1,113			960			992			1,379			1,260			2,028			2,639
Corporate and Other
Service fees (1)			3			3			2			3			1			3			6			4
Net investment income			16			15			15			14			10			13			31			23
Realized capital gains and losses			8			4			7			5			6			(2	)		12			4
Total Corporate and Other revenues before reclassification of services fees			27			22			24			22			17			14			49			31
Reclassification of service fees (1)			(3	)		(3	)		(2	)		(3	)		(1	)		(3	)		(6	)		(4	)
Total Corporate and Other revenues			24			19			22			19			16			11			43			27
Consolidated revenues		$	7,656		$	7,749		$	8,058		$	7,582		$	8,490		$	7,883		$	15,405		$	16,373

(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)

		June 30,			March 31,			Dec. 31,			Sept. 30,			June 30,
		2010			2010			2009			2009			2009
Assets
Investments
Fixed income securities, at fair value (amortized cost $81,425, $82,486, $81,243, $81,367 and $79,890)	$	81,925		$	81,284		$	78,766		$	78,561		$	72,766
Equity securities, at fair value (cost $3,356, $3,436, $4,845, $4,274 and $3,483)		3,254			3,807			5,024			4,603			3,297
Mortgage loans		7,173			7,639			7,935			8,853			9,406
Limited partnership interests		3,119			2,802			2,744			2,770			2,464
Short-term, at fair value (amortized cost $2,414, $2,482, $3,056, $3,470 and $6,070)		2,414			2,482			3,056			3,470			6,070
Other		2,058			2,209			2,308			2,369			2,455
Total investments		99,943			100,223			99,833			100,626			96,458
Cash		711			704			612			727			667
Premium installment receivables, net		4,830			4,823			4,839			4,970			4,794
Deferred policy acquisition costs		5,003			5,186			5,470			6,916			8,228
Reinsurance recoverables, net (1)		6,537			6,415			6,355			6,460			6,621
Accrued investment income		851			904			864			901			859
Deferred income taxes		1,301			1,440			1,870			1,520			2,710
Property and equipment, net		935			954			990			1,013			1,031
Goodwill		874			874			875			874			874
Other assets		1,822			1,804			1,872			2,471			2,656
Separate Accounts		8,003			9,059			9,072			9,026			8,193
Total assets	$	130,810		$	132,386		$	132,652		$	135,504		$	133,091
		June 30,			March 31,			Dec. 31,			Sept. 30,			June 30,
		2010			2010			2009			2009			2009
Liabilities
Reserve for property-liability insurance claims and claims expense	$	19,434		$	19,420		$	19,167		$	19,176		$	19,271
Reserve for life-contingent contract benefits		13,483			13,052			12,910			12,849			12,835
Contractholder funds		49,443			51,027			52,582			53,336			53,999
Unearned premiums		9,684			9,575			9,822			10,069			9,755
Claim payments outstanding		733			763			742			772			813
Other liabilities and accrued expenses		6,054			5,992			5,726			6,081			6,469
Long-term debt		5,909			5,910			5,910			6,661			6,658
Separate Accounts		8,003			9,059			9,072			9,026			8,193
Total liabilities		112,743			114,798			115,931			117,970			117,993
Equity
Common stock, 538 million, 538 million, 537 million, 536 million and 536 million shares outstanding		9			9			9			9			9
Additional capital paid-in		3,155			3,152			3,172			3,160			3,144
Retained income		31,552			31,514			31,492			31,083			30,969
Deferred ESOP expense		(44	)		(44	)		(47	)		(47	)		(47	)
Treasury stock, at cost (362 million, 362 million, 363 million, 364 million and 364 million shares)		(15,760	)		(15,782	)		(15,828	)		(15,832	)		(15,835	)
Accumulated other comprehensive income:
Unrealized net capital gains and losses:
Unrealized net capital losses on fixed income securities with other-than-temporary impairment		(332	)		(384	)		(441	)		(411	)		(380	)
Other unrealized net capital gains and losses		588			(172	)		(1,072	)		(1,218	)		(4,374	)
Unrealized adjustment to DAC, DSI and insurance reserves		72			472			643			1,741			2,642
Total unrealized net capital gains and losses		328			(84	)		(870	)		112			(2,112	)
Unrealized foreign currency translation adjustments		43			60			46			42			17
Unrecognized pension and other postretirement benefit cost		(1,244	)		(1,265	)		(1,282	)		(1,022	)		(1,077	)
Total accumulated other comprehensive loss		(873	)		(1,289	)		(2,106	)		(868	)		(3,172	)
Total shareholders’ equity		18,039			17,560			16,692			17,505			15,068
Noncontrolling interest		28			28			29			29			30
Total equity		18,067			17,588			16,721			17,534			15,098
Total liabilities and equity	$	130,810		$	132,386		$	132,652		$	135,504		$	133,091

(1)Reinsurance recoverables of unpaid losses related to Property-Liability were $2,176 million, $2,162 million, $2,139 million, $2,140 million and $2,162 million at June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively.

4

THE ALLSTATE CORPORATION

BOOK VALUE PER SHARE

($ in millions, except per share data )

		June 30,		March 31,			Dec. 31,			Sept. 30,			June 30,			March 31,
		2010		2010			2009			2009			2009			2009
Book value per share
Numerator:
Shareholders’ equity	$	18,039	$	17,560		$	16,692		$	17,505		$	15,068		$	12,242
Denominator:
Shares outstanding and dilutive potential shares outstanding		542.7		544.3			541.3			542.1			540.6			540.5
Book value per share	$	33.24	$	32.26		$	30.84		$	32.29		$	27.87		$	22.65
Book value per share, excluding the impact of unrealized net capital gains and losses on fixed income securities *
Numerator:
Shareholders’ equity	$	18,039	$	17,560		$	16,692		$	17,505		$	15,068		$	12,242
Unrealized net capital gains and losses on fixed income securities		398		(309	)		(967	)		(81	)		(1,988	)		(3,314	)
Adjusted shareholders’ equity	$	17,641	$	17,869		$	17,659		$	17,586		$	17,056		$	15,556
Denominator:
Shares outstanding and dilutive potential shares outstanding		542.7		544.3			541.3			542.1			540.6			540.5
Book value per share, excluding the impact of unrealized net capital gains and losses on fixed income securities	$	32.51	$	32.83		$	32.62		$	32.44		$	31.55		$	28.78

5

THE ALLSTATE CORPORATION

RETURN ON SHAREHOLDERS’ EQUITY

($ in millions)

	Twelve months ended
			June 30,				March 31,				Dec. 31,				Sept. 30,				June 30,				March 31,
			2010				2010				2009				2009				2009				2009
Return on Shareholders’ Equity
Numerator:
Net income (loss) (1)		$	1,004			$	1,248			$	854			$	(793	)		$	(1,937	)		$	(2,301	)
Denominator:
Beginning shareholders’ equity		$	15,068			$	12,242			$	12,641			$	16,938			$	19,709			$	20,303
Ending shareholders’ equity			18,039				17,560				16,692				17,505				15,068				12,242
Average shareholders’ equity (2)		$	16,554			$	14,901			$	14,667			$	17,222			$	17,389			$	16,273
Return on shareholders’ equity			6.1		%		8.4		%		5.8		%		(4.6	)	%		(11.1	)	%		(14.1	)	%
Operating Income Return on Shareholders’ Equity *
Numerator:
Operating income (1)		$	1,946			$	1,802			$	1,881			$	1,807			$	1,079			$	1,465
Denominator:
Beginning shareholders’ equity		$	15,068			$	12,242			$	12,641			$	16,938			$	19,709			$	20,303
Unrealized net capital gains and losses			(2,112	)			(3,767	)			(3,738	)			(1,475	)			(274	)			(280	)
Adjusted beginning shareholders’ equity			17,180				16,009				16,379				18,413				19,983				20,583
Ending shareholders’ equity			18,039				17,560				16,692				17,505				15,068				12,242
Unrealized net capital gains and losses			328				(84	)			(870	)			112				(2,112	)			(3,767	)
Adjusted ending shareholders’ equity			17,711				17,644				17,562				17,393				17,180				16,009
Average adjusted shareholders’ equity(2)		$	17,446			$	16,827			$	16,971			$	17,903			$	18,582			$	18,296
Operating income return on shareholders’ equity			11.2		%		10.7		%		11.1		%		10.1		%		5.8		%		8.0		%

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

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

6

THE ALLSTATE CORPORATION

DEBT TO CAPITAL

($ in millions)

		June 30,				March 31,				Dec. 31,				Sept. 30,				June 30,				March 31,
		2010				2010				2009				2009				2009				2009
Debt
Long-term debt	$	5,909			$	5,910			$	5,910			$	6,661			$	6,658			$	5,659
Capital resources
Debt	$	5,909			$	5,910			$	5,910			$	6,661			$	6,658			$	5,659
Shareholders’ equity
Common stock		9				9				9				9				9				9
Additional capital paid-in		3,155				3,152				3,172				3,160				3,144				3,129
Retained income		31,552				31,514				31,492				31,083				30,969				29,825
Deferred ESOP expense		(44	)			(44	)			(47	)			(47	)			(47	)			(46	)
Treasury stock		(15,760	)			(15,782	)			(15,828	)			(15,832	)			(15,835	)			(15,836	)
Unrealized net capital gains and losses		328				(84	)			(870	)			112				(2,112	)			(3,767	)
Unrealized foreign currency translation adjustments		43				60				46				42				17				(3	)
Unrecognized pension and other postretirement benefit cost		(1,244	)			(1,265	)			(1,282	)			(1,022	)			(1,077	)			(1,069	)
Total shareholders’ equity		18,039				17,560				16,692				17,505				15,068				12,242
Total capital resources	$	23,948			$	23,470			$	22,602			$	24,166			$	21,726			$	17,901
Ratio of debt to shareholders’ equity		32.8		%		33.7		%		35.4		%		38.1		%		44.2		%		46.2		%
Ratio of debt to capital resources		24.7		%		25.2		%		26.1		%		27.6		%		30.6		%		31.6		%

7

THE ALLSTATE CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

($ in millions)

	Three months ended																				Six months ended
			June 30,			March 31,			Dec. 31,			Sept. 30,			June 30,			March 31,			June 30,			June 30,
			2010			2010			2009			2009			2009			2009			2010			2009
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)		$	145		$	120		$	518		$	221		$	389		$	(274	)	$	265		$	115
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, amortization and other non-cash items			10			16			(4	)		(1	)		(12	)		(74	)		26			(86	)
Realized capital gains and losses			451			348			33			519			(328	)		359			799			31
Gain on disposition of operations			(2	)		(1	)		(1	)		(2	)		(1	)		(3	)		(3	)		(4	)
Interest credited to contractholder funds			450			463			490			496			561			579			913			1,140
Changes in:
Policy benefits and other insurance reserves			118			188			(117	)		(312	)		96			(244	)		306			(148	)
Unearned premiums			126			(261	)		(253	)		289			47			(330	)		(135	)		(283	)
Deferred policy acquisition costs			(100	)		30			43			(77	)		167			381			(70	)		548
Premium installment receivables, net			(15	)		24			134			(163	)		(16	)		71			9			55
Reinsurance recoverables, net			(134	)		(72	)		16			32			(52	)		(81	)		(206	)		(133	)
Income taxes			1			73			485			(184	)		(84	)		1,443			74			1,359
Other operating assets and liabilities			80			36			(558	)		215			193			(305	)		116			(112	)
Net cash provided by operating activities			1,130			964			786			1,033			960			1,522			2,094			2,482
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sales
Fixed income securities			4,184			4,930			5,261			7,242			4,373			4,483			9,114			8,856
Equity securities			1,056			1,990			2,258			1,089			1,675			1,872			3,046			3,547
Limited partnership interests			132			146			76			79			60			154			278			214
Mortgage loans			41			3			200			(1	)		129			12			44			141
Other investments			25			37			91			167			246			16			62			262
Investment collections
Fixed income securities			1,269			1,122			1,609			1,289			1,455			1,203			2,391			2,658
Mortgage loans			375			263			671			495			126			472			638			598
Other investments			26			18			18			34			34			31			44			65
Investment purchases
Fixed income securities			(4,801	)		(7,099	)		(6,879	)		(10,270	)		(6,999	)		(5,425	)		(11,900	)		(12,424	)
Equity securities			(945	)		(556	)		(2,505	)		(1,784	)		(2,274	)		(1,933	)		(1,501	)		(4,207	)
Limited partnership interests			(431	)		(185	)		(110	)		(406	)		(124	)		(144	)		(616	)		(268	)
Mortgage loans			(9	)		(1	)		(3	)		(9	)		(4	)		(10	)		(10	)		(14	)
Other investments			(36	)		(43	)		(10	)		(13	)		(41	)		-			(79	)		(41	)
Change in short-term investments, net			28			411			544			2,270			2,460			707			439			3,167
Change in other investments, net			(79	)		(49	)		(196	)		(64	)		(32	)		(48	)		(128	)		(80	)
Disposition of operations			-			-			-			-			-			12			-			12
Purchases of property and equipment, net			(45	)		(24	)		(46	)		(39	)		(51	)		(53	)		(69	)		(104	)
Net cash provided by investing activities			790			963			979			79			1,033			1,349			1,753			2,382
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of long-term debt			-			-			-			3			1,000			-			-			1,000
Repayment of long-term debt			(1	)		-			(751	)		-			(1	)		-			(1	)		(1	)
Contractholder fund deposits			739			828			898			802			1,152			1,298			1,567			2,450
Contractholder fund withdrawals			(2,543	)		(2,569	)		(1,921	)		(1,749	)		(4,159	)		(3,577	)		(5,112	)		(7,736	)
Dividends paid			(108	)		(107	)		(108	)		(107	)		(107	)		(220	)		(215	)		(327	)
Treasury stock purchases			-			(5	)		(1	)		-			-			(3	)		(5	)		(3	)
Shares reissued under equity incentive plans, net			11			14			1			2			-			-			25			-
Excess tax benefits on share-based payment arrangements			(2	)		(2	)		1			-			-			(6	)		(4	)		(6	)
Other			(9	)		6			1			(3	)		(48	)		59			(3	)		11
Net cash used in financing activities			(1,913	)		(1,835	)		(1,880	)		(1,052	)		(2,163	)		(2,449	)		(3,748	)		(4,612	)
NET INCREASE (DECREASE) IN CASH			7			92			(115	)		60			(170	)		422			99			252
CASH AT BEGINNING OF PERIOD			704			612			727			667			837			415			612			415
CASH AT END OF PERIOD		$	711		$	704		$	612		$	727		$	667		$	837		$	711		$	667

8

THE ALLSTATE CORPORATION

ANALYSIS OF DEFERRED POLICY ACQUISITION COSTS

($ in millions)

		Change in Deferred Policy Acquisition Costs
		For the three months ended June 30, 2010
								Accretion
								(amortization)
								relating to
								realized		Amortization		Effect of
		Beginning		Acquisition		Amortization		capital		acceleration		unrealized		Ending
		balance		costs		before		gains and		charged		capital gains		balance
		March 31, 2010		deferred		adjustments (1)(2)		losses (2)		to income (2)		and losses		June 30, 2010
Property-Liability	$	1,357	$	924	$	(914)	$	-	$	-	$	-	$	1,367
Allstate Financial:
Traditional life and accident and health		659		37		(27)		-		-		-		669
Interest-sensitive life		2,209		70		5		8		-		(67)		2,225
Fixed annuity		956		16		(18)		(2)		-		(214)		738
Other		5		-		(1)		-		-		-		4
Sub-total		3,829		123		(41)		6		-		(281)		3,636
Consolidated	$	5,186	$	1,047	$	(955)	$	6	$	-	$	(281)	$	5,003

		Change in Deferred Policy Acquisition Costs
		For the three months ended June 30, 2009
												Accretion
						Impact of						(amortization)
				Impact of		adoption of new						relating to
				adoption of new		OTTI accounting						realized		Amortization		Effect of
		Beginning		OTTI accounting		effect of		Acquisition		Amortization		capital		acceleration		unrealized		Ending
		balance		before		unrealized capital		costs		before		gains and		charged		capital gains		balance
		March 31, 2009		unrealized impact (3)		gains and losses (4)		deferred		adjustments (1)(2)		losses (2)		to income (2)		and losses		June 30, 2009
Property-Liability	$	1,404	$	-	$	-	$	937	$	(940)	$	-	$	-	$	-	$	1,401
Allstate Financial:
Traditional life and accident and health		601		-		-		40		(27)		-		-		-		614
Interest-sensitive life		2,457		(6)		6		57		(48)		2		-		(82)		2,386
Fixed annuity		3,910		(170)		170		30		(54)		(161)		-		96		3,821
Other		7		-		-		-		(1)		-		-		-		6
Sub-total		6,975		(176)		176		127		(130)		(159)		-		14		6,827
Consolidated	$	8,379	$	(176)	$	176	$	1,064	$	(1,070)	$	(159)	$	-	$	14	$	8,228

(1)Amortization before adjustments reflects total DAC amortization before amortization/accretion related to realized capital gains and losses and amortization acceleration/deceleration charged/credited to income.

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

(3)The adoption of new accounting guidance for the recognition of other-than-temporary impairments of fixed income securities (“new OTTI accounting”) resulted in an adjustment to DAC to reverse previously recorded DAC accretion related to realized capital losses that were reclassified to other comprehensive income upon adoption on April 1, 2009. The adjustment was recorded as a reduction of the DAC balance and retained earnings.

(4)The adoption of new OTTI accounting resulted in an adjustment to DAC due to the change in unrealized capital gains and losses balance that occurred upon adoption on April 1, 2009 when previously recorded realized capital losses were reclassified to other comprehensive income. The adjustment was recorded as an increase of the DAC balance and unrealized net capital gains and losses.

9

THE ALLSTATE CORPORATION

ANALYSIS OF DEFERRED POLICY ACQUISITION COSTS

($ in millions)

	Change in Deferred Policy Acquisition Costs																		Reconciliation of Deferred Policy
	For the six months ended June 30, 2010																		Acquisition Costs as of June 30, 2010
									Accretion
									(amortization)
									relating to			Amortization								DAC before					DAC after
									realized			deceleration			Effect of					impact of		Impact of			impact of
		Beginning		Acquisition		Amortization			capital			(acceleration)			unrealized			Ending		unrealized		unrealized			unrealized
		balance		costs		before			gains and			credited (charged)			capital gains			balance		capital gains		capital gains			capital gains
		Dec. 31, 2009		deferred		adjustments (1)(2)			losses (2)			to income (2)			and losses			June 30, 2010		and losses		and losses			and losses
Property-Liability	$	1,410	$	1,796	$	(1,839	)	$	-		$	-		$	-		$	1,367	$	1,367	$	-		$	1,367
Allstate Financial:
Traditional life and accident and health		650		75		(56	)		-			-			-			669		669		-			669
Interest-sensitive life		2,246		131		(39	)		6			13			(132	)		2,225		2,260		(35	)		2,225
Fixed annuity		1,159		31		(43	)		(3	)		(1	)		(405	)		738		370		368			738
Other		5		-		(1	)		-			-			-			4		4		-			4
Sub-total		4,060		237		(139	)		3			12			(537	)		3,636		3,303		333			3,636
Consolidated	$	5,470	$	2,033	$	(1,978	)	$	3		$	12		$	(537	)	$	5,003	$	4,670	$	333		$	5,003

	Change in Deferred Policy Acquisition Costs																							Reconciliation of Deferred Policy
	For the six months ended June 30, 2009																							Acquisition Costs as of June 30, 2009
														Accretion
							Impact of							(amortization)
				Impact of			adoption of new							relating to			Amortization								DAC before				DAC after
				adoption of new			OTTI accounting							realized			deceleration			Effect of					impact of		Impact of		impact of
		Beginning		OTTI accounting			effect of		Acquisition		Amortization			capital			(acceleration)			unrealized			Ending		unrealized		unrealized		unrealized
		balance		before			unrealized capital		costs		before			gains and			credited (charged)			capital gains			balance		capital gains		capital gains		capital gains
		Dec. 31, 2008		unrealized impact (3)			gains and losses (4)		deferred		adjustments (1)(2)			losses (2)			to income (2)			and losses			June 30, 2009		and losses		and losses		and losses
Property-Liability	$	1,453	$	-		$	-	$	1,837	$	(1,889	)	$	-		$	-		$	-		$	1,401	$	1,401	$	-	$	1,401
Allstate Financial:
Traditional life and accident and health		595		-			-		74		(55	)		-			-			-			614		614		-		614
Interest-sensitive life		2,449		(6	)		6		104		(89	)		2			12			(92	)		2,386		2,116		270		2,386
Fixed annuity		4,037		(170	)		170		60		(128	)		(188	)		(289	)		329			3,821		425		3,396		3,821
Other		8		-			-		-		(2	)		-			-			-			6		6		-		6
Sub-total		7,089		(176	)		176		238		(274	)		(186	)		(277	)		237			6,827		3,161		3,666		6,827
Consolidated	$	8,542	$	(176	)	$	176	$	2,075	$	(2,163	)	$	(186	)	$	(277	)	$	237		$	8,228	$	4,562	$	3,666	$	8,228

(1)Amortization before adjustments reflects total DAC amortization before amortization/accretion related to realized capital gains and losses and amortization acceleration/deceleration charged/credited to income.

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

(3)The adoption of new accounting guidance for the recognition of other-than-temporary impairments of fixed income securities (“new OTTI accounting”) resulted in an adjustment to DAC to reverse previously recorded DAC accretion related to realized capital losses that were reclassified to other comprehensive income upon adoption on April 1, 2009.  The adjustment was recorded as a reduction of the DAC balance and retained earnings.

(4)The adoption of new OTTI accounting resulted in an adjustment to DAC due to the change in unrealized capital gains and losses balance that occurred upon adoption on April 1, 2009 when previously recorded realized capital losses were reclassified to other comprehensive income.  The adjustment was recorded as an increase of the DAC balance and unrealized net capital gains and losses.

10

THE ALLSTATE CORPORATION

PROPERTY-LIABILITY RESULTS

($ in millions, except ratios)

	Three months ended																				Six months ended
			June 30,			March 31,			Dec. 31,			Sept. 30,			June 30,			March 31,			June 30,			June 30,
			2010			2010			2009			2009			2009			2009			2010			2009
Premiums written *		$	6,640		$	6,258		$	6,277		$	6,810		$	6,615		$	6,269		$	12,898		$	12,884
(Increase) decrease in unearned premiums			(110	)		245			248			(315	)		(70	)		337			135			267
Other			(17	)		-			(8	)		40			15			(24	)		(17	)		(9	)
Premiums earned			6,513			6,503			6,517			6,535			6,560			6,582			13,016			13,142
Claims and claims expense			(4,714	)		(4,792	)		(4,451	)		(4,573	)		(5,002	)		(4,720	)		(9,506	)		(9,722	)
Amortization of deferred policy acquisition costs			(914	)		(925	)		(957	)		(943	)		(940	)		(949	)		(1,839	)		(1,889	)
Operating costs and expenses			(664	)		(704	)		(648	)		(642	)		(591	)		(678	)		(1,368	)		(1,269	)
Restructuring and related charges			(14	)		(11	)		(17	)		(31	)		(30	)		(27	)		(25	)		(57	)
Underwriting income (loss) *			207			71			444			346			(3	)		208			278			205
Net investment income			310			304			324			326			334			344			614			678
Periodic settlements and accruals on non-hedge derivative instruments			(1	)		(1	)		(2	)		(2	)		(3	)		(3	)		(2	)		(6	)
Income tax expense on operations			(148	)		(88	)		(212	)		(169	)		(39	)		(135	)		(236	)		(174	)
Operating income			368			286			554			501			289			414			654			703
Realized capital gains and losses, after-tax			(69	)		(123	)		151			(188	)		131			(316	)		(192	)		(185	)
Reclassification of periodic settlements and accruals on non-hedge derivative instruments, after-tax			-			1			2			1			2			2			1			4
Net income		$	299		$	164		$	707		$	314		$	422		$	100		$	463		$	522
Catastrophe losses		$	636		$	648		$	328		$	407		$	818		$	516		$	1,284		$	1,334
Operating ratios *
Claims and claims expense ratio			72.4			73.7			68.3			70.0			76.2			71.7			73.1			74.0
Expense ratio (1)			24.4			25.2			24.9			24.7			23.8			25.1			24.8			24.4
Combined ratio			96.8			98.9			93.2			94.7			100.0			96.8			97.9			98.4
Combined ratio excluding the effect of catastrophes *			87.0			88.9			88.2			88.5			87.5			89.0			88.0			88.2
Effect of catastrophe losses on combined ratio *			9.8			10.0			5.0			6.2			12.5			7.8			9.9			10.2
Combined ratio			96.8			98.9			93.2			94.7			100.0			96.8			97.9			98.4
Combined ratio excluding the effect of catastrophes and prior year reserve reestimates (“underlying”) *			88.1			89.1			88.1			88.0			87.2			88.9			88.6			88.1
Effect of catastrophe losses on combined ratio *			9.8			10.0			5.0			6.2			12.5			7.8			9.9			10.2
Effect of prior year reserve reestimates on combined ratio *			(2.3	)		(0.4	)		(0.4	)		(0.7	)		0.3			(0.8	)		(1.3	)		(0.3	)
Effect of catastrophe losses included in prior year reserve reestimates on combined ratio			1.2			0.2			0.5			1.2			-			0.9			0.7			0.4
Combined ratio			96.8			98.9			93.2			94.7			100.0			96.8			97.9			98.4
Effect of restructuring and related charges on combined ratio *			0.2			0.2			0.3			0.5			0.5			0.4			0.2			0.4
Effect of Discontinued Lines and Coverages on combined ratio			-			0.1			0.1			0.3			-			0.1			0.1			-

(1)      The increase in the expense ratio in both the second quarter and first six months of 2010 compared to the same periods of 2009 reflects increased investments in marketing, increases in the net costs of employee benefits due to unfavorable investment results and lower premiums earned, partially offset by improved operational efficiencies.

11

THE ALLSTATE CORPORATION

PROPERTY-LIABILITY UNDERWRITING RESULTS BY AREA OF BUSINESS

($ in millions)

	Three months ended																				Six months ended
			June 30,			March 31,			Dec. 31,			Sept. 30,			June 30,			March 31,			June 30,			June 30,
			2010			2010			2009			2009			2009			2009			2010			2009
Property-Liability Underwriting Summary
Allstate Protection		$	209		$	75		$	449		$	363		$	1		$	214		$	284		$	215
Discontinued Lines and Coverages			(2	)		(4	)		(5	)		(17	)		(4	)		(6	)		(6	)		(10	)
Underwriting income (loss)		$	207		$	71		$	444		$	346		$	(3	)	$	208		$	278		$	205
Allstate Protection Underwriting Summary
Premiums written		$	6,640		$	6,258		$	6,277		$	6,810		$	6,615		$	6,270		$	12,898		$	12,885
Premiums earned		$	6,513		$	6,503		$	6,517		$	6,535		$	6,560		$	6,583		$	13,016		$	13,143
Claims and claims expense			(4,713	)		(4,790	)		(4,448	)		(4,557	)		(5,000	)		(4,717	)		(9,503	)		(9,717	)
Amortization of deferred policy acquisition costs			(914	)		(925	)		(957	)		(943	)		(940	)		(949	)		(1,839	)		(1,889	)
Operating costs and expenses			(663	)		(702	)		(646	)		(641	)		(589	)		(676	)		(1,365	)		(1,265	)
Restructuring and related charges			(14	)		(11	)		(17	)		(31	)		(30	)		(27	)		(25	)		(57	)
Underwriting income		$	209		$	75		$	449		$	363		$	1		$	214		$	284		$	215
Catastrophe losses		$	636		$	648		$	328		$	407		$	818		$	516		$	1,284		$	1,334
Operating ratios
Claims and claims expense ratio			72.4			73.6			68.2			69.7			76.2			71.6			73.0			74.0
Expense ratio			24.4			25.2			24.9			24.7			23.8			25.1			24.8			24.4
Combined ratio			96.8			98.8			93.1			94.4			100.0			96.7			97.8			98.4
Effect of catastrophe losses on combined ratio			9.8			10.0			5.0			6.2			12.5			7.8			9.9			10.1
Effect of restructuring and related charges on combined ratio			0.2			0.2			0.3			0.5			0.5			0.4			0.2			0.4
Discontinued Lines and Coverages Underwriting Summary
Premiums written		$	-		$	-		$	-		$	-		$	-		$	(1	)	$	-		$	(1	)
Premiums earned		$	-		$	-		$	-		$	-		$	-		$	(1	)	$	-		$	(1	)
Claims and claims expense			(1	)		(2	)		(3	)		(16	)		(2	)		(3	)		(3	)		(5	)
Operating costs and expenses			(1	)		(2	)		(2	)		(1	)		(2	)		(2	)		(3	)		(4	)
Underwriting loss		$	(2	)	$	(4	)	$	(5	)	$	(17	)	$	(4	)	$	(6	)	$	(6	)	$	(10	)
Effect of Discontinued Lines and Coverages on the Property-Liability combined ratio			-			0.1			0.1			0.3			-			0.1			0.1			-

12

THE ALLSTATE CORPORATION

PROPERTY-LIABILITY PREMIUMS WRITTEN BY MARKET SEGMENT

($ in millions)

	Three months ended															Six months ended
			June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,			June 30,		June 30,
			2010		2010		2009		2009		2009		2009			2010		2009
Allstate brand (1)
Standard auto		$	3,948	$	4,023	$	3,860	$	4,049	$	3,876	$	3,978		$	7,971	$	7,854
Non-standard auto			220		237		219		235		232		241			457		473
Auto			4,168		4,260		4,079		4,284		4,108		4,219			8,428		8,327
Involuntary auto			25		16		15		13		15		12			41		27
Commercial lines			137		131		128		132		147		143			268		290
Homeowners			1,565		1,189		1,359		1,573		1,532		1,171			2,754		2,703
Other personal lines			457		399		410		460		451		391			856		842
			6,352		5,995		5,991		6,462		6,253		5,936			12,347		12,189
Encompass brand
Standard auto			169		160		171		208		217		204			329		421
Non-standard auto			1		3		3		6		5		8			4		13
Auto			170		163		174		214		222		212			333		434
Involuntary auto			3		2		2		2		3		3			5		6
Homeowners			94		80		89		110		112		97			174		209
Other personal lines			21		18		21		22		25		22			39		47
			288		263		286		348		362		334			551		696
Allstate Protection			6,640		6,258		6,277		6,810		6,615		6,270			12,898		12,885
Discontinued Lines and Coverages			-		-		-		-		-		(1	)		-		(1	)
Property-Liability		$	6,640	$	6,258	$	6,277	$	6,810	$	6,615	$	6,269		$	12,898	$	12,884
Allstate Protection
Standard auto		$	4,117	$	4,183	$	4,031	$	4,257	$	4,093	$	4,182		$	8,300	$	8,275
Non-standard auto			221		240		222		241		237		249			461		486
Auto			4,338		4,423		4,253		4,498		4,330		4,431			8,761		8,761
Involuntary auto			28		18		17		15		18		15			46		33
Commercial lines			137		131		128		132		147		143			268		290
Homeowners			1,659		1,269		1,448		1,683		1,644		1,268			2,928		2,912
Other personal lines			478		417		431		482		476		413			895		889
		$	6,640	$	6,258	$	6,277	$	6,810	$	6,615	$	6,270		$	12,898	$	12,885

(1) Allstate brand premiums written, excluding Allstate Canada, by the direct channel totaled $181 million, $185 million, $161 million, $169 million, $146 million and $146 million for the three months ended June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009, June 30, 2009 and March 31, 2009, respectively.  The direct channel includes call centers and the internet.  Allstate brand premiums written by the direct channel totaled $366 million and $292 million for the six months ended June 30, 2010 and June 30, 2009, respectively.

13

THE ALLSTATE CORPORATION

ALLSTATE PROTECTION MARKET SEGMENT ANALYSIS

($ in millions)

		Three months ended June 30,
		2010		2009		2010		2009		2010		2009		2010		2009	2010	2009	2010	2009	2010	2009	2010	2009
																			Effect of				Effect of pre-tax
										Incurred									catastrophe losses				reserve reestimates
		Premiums earned				Incurred losses				catastrophe losses				Expenses			Loss ratio (2)		on the loss ratio		Expense ratio		on the combined ratio
Allstate brand
Standard auto	$	3,969	$	3,928	$	2,783	$	2,779	$	78	$	83	$	969	$	949	70.1	70.7	2.0	2.1	24.4	24.2	(1.9)	(0.1)
Non-standard auto		228		240		157		161		1		3		60		57	68.9	67.1	0.4	1.3	26.3	23.7	(4.8)	(2.5)
Auto		4,197		4,168		2,940		2,940		79		86		1,029		1,006	70.1	70.6	1.9	2.1	24.5	24.1	(2.1)	(0.2)
Homeowners		1,416		1,409		1,169		1,340		492		645		309		299	82.6	95.1	34.7	45.8	21.8	21.2	(4.2)	(0.9)
Other (1)		592		600		389		435		49		59		168		152	65.7	72.5	8.3	9.8	28.4	25.3	(0.7)	5.0
Total Allstate brand		6,205		6,177		4,498		4,715		620		790		1,506		1,457	72.5	76.3	10.0	12.8	24.3	23.6	(2.4)	0.1
Encompass brand
Standard auto		185		234		135		172		1		1		50		61	73.0	73.5	0.5	0.4	27.0	26.1	1.6	2.1
Non-standard auto		2		7		2		6		-		-		1		2	100.0	85.7	-	-	50.0	28.6	-	(14.3)
Auto		187		241		137		178		1		1		51		63	73.2	73.9	0.5	0.4	27.3	26.1	1.6	1.7
Homeowners		96		114		62		87		15		26		29		32	64.6	76.3	15.6	22.8	30.2	28.1	(1.0)	1.8
Other (1)		25		28		16		20		-		1		5		7	64.0	71.4	-	3.6	20.0	25.0	(4.0)	7.1
Total Encompass brand		308		383		215		285		16		28		85		102	69.8	74.4	5.2	7.3	27.6	26.6	0.3	2.1
Allstate Protection	$	6,513	$	6,560	$	4,713	$	5,000	$	636	$	818	$	1,591	$	1,559	72.4	76.2	9.8	12.5	24.4	23.8	(2.3)	0.3
		Six months ended June 30,
		2010		2009		2010		2009		2010		2009		2010		2009	2010	2009	2010	2009	2010	2009	2010	2009
																			Effect of				Effect of pre-tax
										Incurred									catastrophe losses				reserve reestimates
		Premiums earned				Incurred losses				catastrophe losses				Expenses			Loss ratio (2)		on the loss ratio		Expense ratio		on the combined ratio
Allstate brand
Standard auto	$	7,912	$	7,845	$	5,522	$	5,475	$	106	$	146	$	1,954	$	1,909	69.8	69.8	1.3	1.9	24.7	24.3	(1.0)	(0.4)
Non-standard auto		458		477		315		323		2		5		116		113	68.8	67.7	0.4	1.0	25.3	23.7	(3.1)	(1.5)
Auto		8,370		8,322		5,837		5,798		108		151		2,070		2,022	69.8	69.7	1.3	1.8	24.7	24.3	(1.1)	(0.4)
Homeowners		2,832		2,826		2,408		2,512		1,017		1,035		646		640	85.0	88.9	35.9	36.6	22.8	22.6	(2.3)	(1.1)
Other (1)		1,184		1,210		765		838		92		106		341		336	64.6	69.2	7.8	8.8	28.8	27.8	(2.3)	2.9
Total Allstate brand		12,386		12,358		9,010		9,148		1,217		1,292		3,057		2,998	72.7	74.0	9.8	10.5	24.7	24.3	(1.5)	(0.3)
Encompass brand
Standard auto		379		481		284		355		3		3		101		128	74.9	73.8	0.8	0.6	26.7	26.6	3.4	(0.2)
Non-standard auto		6		16		6		12		-		-		2		5	100.0	75.0	-	-	33.3	31.3	-	(6.3)
Auto		385		497		290		367		3		3		103		133	75.3	73.8	0.8	0.6	26.8	26.8	3.4	(0.4)
Homeowners		196		232		165		160		61		38		58		66	84.2	69.0	31.1	16.4	29.6	28.4	(1.5)	(5.6)
Other (1)		49		56		38		42		3		1		11		14	77.6	75.0	6.1	1.8	22.4	25.0	-	10.7
Total Encompass brand		630		785		493		569		67		42		172		213	78.3	72.5	10.6	5.4	27.3	27.1	1.6	(1.1)
Allstate Protection	$	13,016	$	13,143	$	9,503	$	9,717	$	1,284	$	1,334	$	3,229	$	3,211	73.0	74.0	9.9	10.1	24.8	24.4	(1.4)	(0.3)

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

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

14

THE ALLSTATE CORPORATION

ALLSTATE PROTECTION HISTORICAL MARKET SEGMENT ANALYSIS

($ in millions)

		Three months ended					Three months ended					Three months ended						Three months ended
		June 30, 2010					March 31, 2010					December 31, 2009						September 30, 2009
				Effect of					Effect of					Effect of						Effect of
		Premiums	Loss	CAT losses	Expense		Premiums	Loss	CAT losses	Expense		Premiums	Loss	CAT losses		Expense		Premiums	Loss	CAT losses	Expense
		earned	ratio	on loss ratio	ratio		earned	ratio	on loss ratio	ratio		earned	ratio	on loss ratio		ratio		earned	ratio	on loss ratio	ratio
Allstate brand
Standard auto	$	3,969	70.1	2.0	24.4	$	3,943	69.4	0.7	25.0	$	3,944	69.2	(0.3	)	24.5	$	3,946	68.6	1.3	24.1
Non-standard auto		228	68.9	0.4	26.3		230	68.7	0.4	24.3		231	69.3	0.4		25.1		231	63.6	0.4	25.6
Auto		4,197	70.1	1.9	24.5		4,173	69.4	0.7	25.0		4,175	69.2	(0.3	)	24.5		4,177	68.4	1.3	24.1
Homeowners		1,416	82.6	34.7	21.8		1,416	87.5	37.1	23.8		1,411	65.1	20.6		23.9		1,396	75.4	22.3	22.9
Other personal lines(1)		592	65.7	8.3	28.4		592	63.5	7.3	29.2		591	66.7	6.6		28.6		601	64.1	4.0	31.6
Total Allstate brand		6,205	72.5	10.0	24.3		6,181	73.0	9.7	25.1		6,177	68.0	5.1		24.8		6,174	69.5	6.3	24.6
Encompass brand
Standard auto		185	73.0	0.5	27.0		194	76.8	1.0	26.3		205	77.5	(0.5	)	25.4		221	76.9	0.5	25.4
Non-standard auto		2	100.0	-	50.0		4	100.0	-	25.0		5	80.0	-		40.0		6	66.7	-	50.0
Auto		187	73.2	0.5	27.3		198	77.3	1.0	26.2		210	77.6	(0.5	)	25.7		227	76.6	0.4	26.0
Homeowners		96	64.6	15.6	30.2		100	103.0	46.0	29.0		104	57.7	9.6		29.8		108	67.6	15.7	29.6
Other personal lines(1)		25	64.0	-	20.0		24	91.7	12.5	25.0		26	88.4	3.8		23.1		26	65.4	-	26.9
Total Encompass brand		308	69.8	5.2	27.6		322	86.4	15.8	27.0		340	72.3	2.9		26.8		361	73.1	5.0	27.2
Allstate Protection	$	6,513	72.4	9.8	24.4	$	6,503	73.6	10.0	25.2	$	6,517	68.2	5.0		24.9	$	6,535	69.7	6.2	24.7
		Three months ended					Three months ended					Three months ended						Three months ended
		June 30, 2009					March 31, 2009					December 31, 2008						September 30, 2008
				Effect of					Effect of					Effect of						Effect of
		Premiums	Loss	CAT losses	Expense		Premiums	Loss	CAT losses	Expense		Premiums	Loss	CAT losses		Expense		Premiums	Loss	CAT losses	Expense
		earned	ratio	on loss ratio	ratio		earned	ratio	on loss ratio	ratio		earned	ratio	on loss ratio		ratio		earned	ratio	on loss ratio	ratio
Allstate brand
Standard auto	$	3,928	70.7	2.1	24.2	$	3,917	68.8	1.6	24.5	$	3,939	73.3	0.6		26.1	$	3,993	66.7	1.9	24.3
Non-standard auto		240	67.1	1.3	23.7		237	68.4	0.8	23.6		246	67.1	0.4		24.8		261	57.1	1.5	24.1
Auto		4,168	70.6	2.1	24.1		4,154	68.8	1.6	24.5		4,185	72.9	0.6		26.0		4,254	66.1	1.9	24.3
Homeowners		1,409	95.1	45.8	21.2		1,417	82.7	27.5	24.1		1,459	59.9	11.6		24.7		1,453	158.1	106.2	23.2
Other personal lines(1)		600	72.5	9.8	25.3		610	66.1	7.7	30.1		606	66.8	8.9		34.7		643	77.0	17.1	28.3
Total Allstate brand		6,177	76.3	12.8	23.6		6,181	71.7	8.1	25.0		6,250	69.3	4.0		26.5		6,350	88.2	27.3	24.5
Encompass brand
Standard auto		234	73.5	0.4	26.1		247	74.1	0.8	27.1		261	78.1	0.4		28.0		272	71.0	1.1	27.2
Non-standard auto		7	85.7	-	28.6		9	66.7	-	33.3		10	130.0	-		50.0		9	77.8	-	33.3
Auto		241	73.9	0.4	26.1		256	73.8	0.8	27.4		271	80.1	0.4		28.8		281	71.2	1.1	27.4
Homeowners		114	76.3	22.8	28.1		118	61.9	10.2	28.8		117	53.0	6.0		33.3		124	113.7	62.9	30.7
Other personal lines(1)		28	71.4	3.6	25.0		28	78.6	-	25.0		30	80.0	16.7		26.7		30	66.6	6.7	26.7
Total Encompass brand		383	74.4	7.3	26.6		402	70.7	3.5	27.6		418	72.5	3.1		29.9		435	83.0	19.1	28.3
Allstate Protection	$	6,560	76.2	12.5	23.8	$	6,583	71.6	7.8	25.1	$	6,668	69.6	3.9		26.7	$	6,785	87.9	26.8	24.7

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

15

THE ALLSTATE CORPORATION

PROPERTY-LIABILITY

HISTORICAL IMPACT OF NET RATE CHANGES APPROVED ON PREMIUMS WRITTEN

	Three months ended						Three months ended				Three months ended			Three months ended
	June 30, 2010 (1)						March 31, 2010				December 31, 2009			September 30, 2009
	Number of				State		Number of			State	Number of		State	Number of			State
	states		Countrywide (%) (4)		specific (%) (5)		states		Countrywide (%) (4)	specific (%) (5)	states	Countrywide (%) (4)	specific (%) (5)	states		Countrywide (%) (4)	specific (%) (5)
Allstate brand
Standard auto (2)	32	(6)(7)	0.2		0.5		8		0.3	2.9	15	1.5	5.5	15		1.4	6.5
Non-standard auto	5	(6)	2.7		10.9		1		0.9	22.1	4	1.1	9.4	4		1.2	5.5
Auto	33	(6)	0.3		0.9		9		0.3	3.3	17	1.5	5.6	17		1.4	6.4
Homeowners (3)	14	(6)	2.0		11.3		6		0.9	7.4	22	1.9	6.5	19	(6)	2.4	6.9
Encompass brand
Standard auto	10		(0.1	)	(0.5	)	6		1.5	7.1	11	1.3	9.5	13		1.6	9.6
Non-standard auto	-		-		-		-		-	-	-	-	-	-		-	-
Auto	10		(0.1	)	(0.5	)	6		1.4	7.1	11	1.3	9.5	13		1.6	9.6
Homeowners	7		-		(0.3	)	5		0.7	5.2	10	0.6	7.9	17		2.0	4.8
	Three months ended						Three months ended				Three months ended			Three months ended
	June 30, 2009						March 31, 2009				December 31, 2008			September 30, 2008
	Number of				State		Number of			State	Number of		State	Number of			State
	states		Countrywide (%) (4)		specific (%) (5)		states		Countrywide (%) (4)	specific (%) (5)	states	Countrywide (%) (4)	specific (%) (5)	states		Countrywide (%) (4)	specific (%) (5)
Allstate brand
Standard auto (2)	12		0.8		4.3		18	(6)	0.9	3.3	8	0.2	4.1	12		0.6	3.8
Non-standard auto	2		0.1		3.2		4		0.1	1.6	2	(0.1)	(16.5)	2		-	0.6
Auto	13		0.8		4.3		19	(6)	0.9	3.3	9	0.2	3.9	13		0.6	3.8
Homeowners (3)	16		1.7		13.3		14		2.5	7.4	4	0.2	3.6	17	(6)	(3.1)	(11.5)
Encompass brand
Standard auto	8		1.0		8.3		24		3.7	8.1	4	0.1	6.7	14		1.3	11.0
Non-standard auto	-		-		-		1		0.9	31.7	1	0.9	49.5	3		4.0	20.7
Auto	8		0.9		8.3		25		3.6	8.1	5	0.2	9.1	16		1.5	11.9
Homeowners	10	(6)	0.5		5.7		18		1.6	6.7	4	1.2	13.1	12		0.5	2.3

(1)Rate changes include changes approved based on our net cost of reinsurance.  These rate changes do not reflect initial rates filed for insurance subsidiaries initially writing business.  Based on historical premiums written in those states, rate changes approved for the three month period ending June 30, 2010 are estimated to total $167 million.  Rate changes do not include rating plan enhancements, including the introduction of discounts and surcharges, that result in no change in the overall rate level in the state.

(2)   Impacts of Allstate brand standard auto effective rate changes as a percentage of total countrywide prior year-end premiums written were (0.1)%, 1.5%, 1.6%, 0.5%, 0.6%, 0.7%, 0.1% and 0.8% for the three months ended June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009, June 30, 2009, March 31, 2009, December 31, 2008 and September 30, 2008, respectively.

(3)   Impacts of Allstate brand homeowners effective rate changes as a percentage of total countrywide prior year-end premiums written were 1.7%, 1.5%, 1.5%, 2.4%, 1.7%, 1.7%, 0.2% and (2.6)% for the three months ended June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009, June 30, 2009, March 31, 2009, December 31, 2008 and September 30, 2008, respectively.

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

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

(6)   Includes Washington, D.C.

(7)   Includes targeted rate decreases in certain markets to improve our competitive position for target customers.

16

THE ALLSTATE CORPORATION

STANDARD AUTO PROFITABILITY MEASURES

	Three months ended														Six months ended
			June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,		June 30,		June 30,
			2010		2010		2009		2009		2009		2009		2010		2009
Standard auto
($ in millions)
Net premiums written
Allstate brand		$	3,948	$	4,023	$	3,860	$	4,049	$	3,876	$	3,978	$	7,971	$	7,854
Encompass brand			169		160		171		208		217		204		329		421
			4,117		4,183		4,031		4,257		4,093		4,182		8,300		8,275
Net premiums earned
Allstate brand		$	3,969	$	3,943	$	3,944	$	3,946	$	3,928	$	3,917	$	7,912	$	7,845
Encompass brand			185		194		205		221		234		247		379		481
			4,154		4,137		4,149		4,167		4,162		4,164		8,291		8,326
Incurred losses
Allstate brand		$	2,783	$	2,739	$	2,729	$	2,708	$	2,779	$	2,696	$	5,522	$	5,475
Encompass brand			135		149		159		170		172		183		284		355
			2,918		2,888		2,888		2,878		2,951		2,879		5,806		5,830
Expenses
Allstate brand		$	969	$	985	$	965	$	949	$	949	$	960	$	1,954	$	1,909
Encompass brand			50		51		52		56		61		67		101		128
			1,019		1,036		1,017		1,005		1,010		1,027		2,055		2,037
Underwriting Income
Allstate brand		$	217	$	219	$	250	$	289	$	200	$	261	$	436	$	461
Encompass brand			-		(6)		(6)		(5)		1		(3)		(6)		(2)
			217		213		244		284		201		258		430		459
Loss ratio
Allstate brand			70.1		69.4		69.2		68.6		70.7		68.8		69.8		69.8
Encompass brand			73.0		76.8		77.5		76.9		73.5		74.1		74.9		73.8
Allstate Protection			70.3		69.8		69.6		69.1		70.9		69.1		70.0		70.0
Expense ratio
Allstate brand			24.4		25.0		24.5		24.1		24.2		24.5		24.7		24.3
Encompass brand			27.0		26.3		25.4		25.4		26.1		27.1		26.7		26.6
Allstate Protection			24.5		25.1		24.5		24.1		24.3		24.7		24.8		24.5
Combined ratio
Allstate brand			94.5		94.4		93.7		92.7		94.9		93.3		94.5		94.1
Encompass brand			100.0		103.1		102.9		102.3		99.6		101.2		101.6		100.4
Allstate Protection			94.8		94.9		94.1		93.2		95.2		93.8		94.8		94.5
Effect of catastrophe losses on loss ratio
Allstate brand			2.0		0.7		(0.3)		1.3		2.1		1.6		1.3		1.9
Encompass brand			0.5		1.0		(0.5)		0.5		0.4		0.8		0.8		0.6
Allstate brand standard auto domestic operating measures (1)
			June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,		June 30,		June 30,
			2010		2010		2009		2009		2009		2009		2010		2009
Operating measures (2)
Policies in force (in thousands)			17,529		17,581		17,744		17,774		17,836		17,843		17,529		17,836
New issued applications (in thousands)			498		464		488		524		496		521		962		1,017
Average premium - gross written ($)			444		443		441		435		430		430		444		430
Average premium - net earned ($)			433		430		428		426		425		424		432		424
Renewal ratio (%)			89.0		88.8		88.8		89.1		89.0		88.6		88.9		88.8
Loss trends
(% change year-over-year)
Bodily injury claim frequency			4.2		5.4		14.4		19.6		13.6		5.5		4.8		9.5
Property damage claim frequency			1.9		(0.1)		7.6		10.7		5.1		1.6		0.9		3.3

(1)Measures and statistics presented for Allstate brand exclude the Company’s Canadian operations and specialty auto.

(2)Refer to the Allstate Brand Domestic Operating Measures and Statistics table for descriptions of these measures.

17

THE ALLSTATE CORPORATION

NON-STANDARD AUTO PROFITABILITY MEASURES

	Three months ended														Six months ended
			June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,		June 30,		June 30,
			2010		2010		2009		2009		2009		2009		2010		2009
Non-standard auto
($ in millions)
Net premiums written
Allstate brand		$	220	$	237	$	219	$	235	$	232	$	241	$	457	$	473
Encompass brand			1		3		3		6		5		8		4		13
			221		240		222		241		237		249		461		486
Net premiums earned
Allstate brand		$	228	$	230	$	231	$	231	$	240	$	237	$	458	$	477
Encompass brand			2		4		5		6		7		9		6		16
			230		234		236		237		247		246		464		493
Incurred losses
Allstate brand		$	157	$	158	$	160	$	147	$	161	$	162	$	315	$	323
Encompass brand			2		4		4		4		6		6		6		12
			159		162		164		151		167		168		321		335
Expenses
Allstate brand		$	60	$	56	$	58	$	59	$	57	$	56	$	116	$	113
Encompass brand			1		1		2		3		2		3		2		5
			61		57		60		62		59		59		118		118
Underwriting Income
Allstate brand		$	11	$	16	$	13	$	25	$	22	$	19	$	27	$	41
Encompass brand			(1)		(1)		(1)		(1)		(1)		-		(2)		(1)
			10		15		12		24		21		19		25		40
Loss ratio
Allstate brand			68.9		68.7		69.3		63.6		67.1		68.4		68.8		67.7
Encompass brand			100.0		100.0		80.0		66.7		85.7		66.7		100.0		75.0
Allstate Protection			69.2		69.2		69.5		63.7		67.6		68.3		69.2		68.0
Expense ratio
Allstate brand			26.3		24.3		25.1		25.6		23.7		23.6		25.3		23.7
Encompass brand			50.0		25.0		40.0		50.0		28.6		33.3		33.3		31.3
Allstate Protection			26.5		24.4		25.4		26.2		23.9		24.0		25.4		23.9
Combined ratio
Allstate brand			95.2		93.0		94.4		89.2		90.8		92.0		94.1		91.4
Encompass brand			150.0		125.0		120.0		116.7		114.3		100.0		133.3		106.3
Allstate Protection			95.7		93.6		94.9		89.9		91.5		92.3		94.6		91.9
Effect of catastrophe losses on loss ratio
Allstate brand			0.4		0.4		0.4		0.4		1.3		0.8		0.4		1.0
Encompass brand			-		-		-		-		-		-		-		-
Allstate brand non-standard auto domestic operating measures (1)
			June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,		June 30,		June 30,
			2010		2010		2009		2009		2009		2009		2010		2009
Operating measures (2)			706		724		719		733		743		750		706		743
Policies in force (in thousands)			77		99		84		91		86		102		176		188
New issued applications (in thousands)			619		619		625		613		612		615		619		613
Average premium - gross written ($)			573		571		574		578		583		591		572		587
Average premium - net earned ($)			72.5		71.8		72.4		72.6		73.3		71.6		72.1		72.4
Renewal ratio (%)
Loss trends
(% change year-over-year)
Bodily injury claim frequency			1.4		6.6		16.7		29.5		26.3		15.9		3.9		21.0
Property damage claim frequency			0.8		3.1		9.4		16.5		10.2		7.1		1.9		8.6

(1)Measures and statistics presented for Allstate brand exclude the Company’s Canadian operations and specialty auto.

(2)Refer to the Allstate Brand Domestic Operating Measures and Statistics page for descriptions of these measures.

18

THE ALLSTATE CORPORATION

AUTO PROFITABILITY MEASURES

	Three months ended																				Six months ended
			June 30,			March 31,			Dec. 31,			Sept. 30,			June 30,			March 31,			June 30,			June 30,
			2010			2010			2009			2009			2009			2009			2010			2009
Auto
($ in millions)
Net premiums written
Allstate brand		$	4,168		$	4,260		$	4,079		$	4,284		$	4,108		$	4,219		$	8,428		$	8,327
Encompass brand			170			163			174			214			222			212			333			434
			4,338			4,423			4,253			4,498			4,330			4,431			8,761			8,761
Net premiums earned
Allstate brand		$	4,197		$	4,173		$	4,175		$	4,177		$	4,168		$	4,154		$	8,370		$	8,322
Encompass brand			187			198			210			227			241			256			385			497
			4,384			4,371			4,385			4,404			4,409			4,410			8,755			8,819
Incurred losses
Allstate brand		$	2,940		$	2,897		$	2,889		$	2,855		$	2,940		$	2,858		$	5,837		$	5,798
Encompass brand			137			153			163			174			178			189			290			367
			3,077			3,050			3,052			3,029			3,118			3,047			6,127			6,165
Expenses
Allstate brand		$	1,029		$	1,041		$	1,023		$	1,008		$	1,006		$	1,016		$	2,070		$	2,022
Encompass brand			51			52			54			59			63			70			103			133
			1,080			1,093			1,077			1,067			1,069			1,086			2,173			2,155
Underwriting Income
Allstate brand		$	228		$	235		$	263		$	314		$	222		$	280		$	463		$	502
Encompass brand			(1	)		(7	)		(7	)		(6	)		-			(3	)		(8	)		(3	)
			227			228			256			308			222			277			455			499
Loss ratio
Allstate brand			70.1			69.4			69.2			68.4			70.6			68.8			69.8			69.7
Encompass brand			73.2			77.3			77.6			76.6			73.9			73.8			75.3			73.8
Allstate Protection			70.2			69.8			69.6			68.8			70.7			69.1			70.0			69.9
Expense ratio
Allstate brand			24.5			25.0			24.5			24.1			24.1			24.5			24.7			24.3
Encompass brand			27.3			26.2			25.7			26.0			26.1			27.4			26.8			26.8
Allstate Protection			24.6			25.0			24.6			24.2			24.3			24.6			24.8			24.4
Combined ratio
Allstate brand			94.6			94.4			93.7			92.5			94.7			93.3			94.5			94.0
Encompass brand			100.5			103.5			103.3			102.6			100.0			101.2			102.1			100.6
Allstate Protection			94.8			94.8			94.2			93.0			95.0			93.7			94.8			94.3
Effect of catastrophe losses on loss ratio
Allstate brand			1.9			0.7			(0.3	)		1.3			2.1			1.6			1.3			1.8
Encompass brand			0.5			1.0			(0.5	)		0.4			0.4			0.8			0.8			0.6
Effect of pre-tax reserve reestimates on combined ratio*
Allstate brand			(2.1	)		(0.1	)		(0.6	)		0.1			(0.2	)		(0.7	)		(1.1	)		(0.4	)
Encompass brand			1.6			5.1			(1.0	)		3.1			1.7			(2.3	)		3.4			(0.4	)

Allstate brand auto domestic operating measures(1)

	June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,	March 31,		June 30,		June 30,
	2010		2010		2009		2009		2009	2009		2010		2009
Operating measures (2)
Policies in force (in thousands)	18,235		18,305		18,463		18,507		18,579	18,593		18,235		18,579
New issued applications (in thousands)	575		563		572		615		582	623		1,138		1,205
Average premium - gross written ($)	452		451		449		443		438	438		451		438
Average premium - net earned ($)	439		436		434		432		431	431		437		431
Renewal ratio (%)	88.3		88.0		88.1		88.3		88.3	87.8		88.2		88.1
Loss trends
(% change year-over-year)
Bodily injury claim frequency	3.9		5.4		14.4		20.1		14.2	5.9		4.6		10.1
Property damage claim frequency	1.8		-		7.7		10.9		5.3	1.7		0.9		3.5
Paid severity - bodily injury	(1.0	)	(1.3	)	(4.9	)	(0.9	)	0.9	2.1		(1.1	)	1.5
Paid severity - property damage	(1.5	)	0.4		0.1		(1.0	)	0.5	(2.4	)	(0.5	)	(1.0	)

(1)Measures and statistics presented for Allstate brand exclude the Company’s Canadian operations and specialty auto.

(2)Refer to the Allstate Brand Domestic Operating Measures and Statistics page for descriptions of these measures.

19

THE ALLSTATE CORPORATION

HOMEOWNERS PROFITABILITY MEASURES

	Three months ended																				Six months ended
			June 30,			March 31,			Dec. 31,			Sept. 30,			June 30,			March 31,			June 30,			June 30,
			2010			2010			2009			2009			2009			2009			2010			2009
Homeowners
($ in millions)
Net premiums written
Allstate brand		$	1,565		$	1,189		$	1,359		$	1,573		$	1,532		$	1,171		$	2,754		$	2,703
Encompass brand			94			80			89			110			112			97			174			209
			1,659			1,269			1,448			1,683			1,644			1,268			2,928			2,912
Net premiums earned
Allstate brand		$	1,416		$	1,416		$	1,411		$	1,396		$	1,409		$	1,417		$	2,832		$	2,826
Encompass brand			96			100			104			108			114			118			196			232
			1,512			1,516			1,515			1,504			1,523			1,535			3,028			3,058
Incurred losses
Allstate brand		$	1,169		$	1,239		$	919		$	1,053		$	1,340		$	1,172		$	2,408		$	2,512
Encompass brand			62			103			60			73			87			73			165			160
			1,231			1,342			979			1,126			1,427			1,245			2,573			2,672
Expenses
Allstate brand		$	309		$	337		$	337		$	319		$	299		$	341		$	646		$	640
Encompass brand			29			29			31			32			32			34			58			66
			338			366			368			351			331			375			704			706
Underwriting Income
Allstate brand		$	(62	)	$	(160	)	$	155		$	24		$	(230	)	$	(96	)	$	(222	)	$	(326	)
Encompass brand			5			(32	)		13			3			(5	)		11			(27	)		6
			(57	)		(192	)		168			27			(235	)		(85	)		(249	)		(320	)
Loss ratio
Allstate brand			82.6			87.5			65.1			75.4			95.1			82.7			85.0			88.9
Encompass brand			64.6			103.0			57.7			67.6			76.3			61.9			84.2			69.0
Allstate Protection			81.4			88.5			64.6			74.9			93.7			81.1			85.0			87.4
Expense ratio
Allstate brand			21.8			23.8			23.9			22.9			21.2			24.1			22.8			22.6
Encompass brand			30.2			29.0			29.8			29.6			28.1			28.8			29.6			28.4
Allstate Protection			22.4			24.2			24.3			23.3			21.7			24.4			23.2			23.1
Combined ratio
Allstate brand			104.4			111.3			89.0			98.3			116.3			106.8			107.8			111.5
Encompass brand			94.8			132.0			87.5			97.2			104.4			90.7			113.8			97.4
Allstate Protection			103.8			112.7			88.9			98.2			115.4			105.5			108.2			110.5
Effect of catastrophe losses on loss ratio
Allstate brand			34.7			37.1			20.6			22.3			45.8			27.5			35.9			36.6
Encompass brand			15.6			46.0			9.6			15.7			22.8			10.2			31.1			16.4
Effect of pre-tax reserve reestimates on combined ratio
Allstate brand			(4.2	)		(0.4	)		(3.3	)		(5.2	)		(0.9	)		(1.2	)		(2.3	)		(1.1	)
Encompass brand			(1.0	)		(2.0	)		(3.8	)		(1.9	)		1.8			(12.7	)		(1.5	)		(5.6	)

Allstate brand homeowners domestic operating measures(1)

	June 30,		March 31,		Dec. 31,		Sept. 30,	June 30,	March 31,	June 30,		June 30,
	2010		2010		2009		2009	2009	2009	2010		2009
Operating measures (2)
Policies in force (in thousands)	6,821		6,886		6,973		7,027	7,104	7,181	6,821		7,104
New issued applications (in thousands)	151		119		136		148	145	127	270		272
Average premium - gross written ($)	933		921		899		889	879	861	927		871
Average premium - net earned ($)	803		795		785		771	768	771	799		770
Renewal ratio (%)	88.3		88.0		88.4		88.5	88.0	87.5	88.2		87.8
Loss trends
(% change year-over-year)
Claim frequency excluding catastrophe losses	1.7		5.1		13.9		13.5	3.9	5.1	3.3		4.5
Claim severity excluding catastrophe losses	(0.7	)	(2.1	)	(8.5	)	9.0	7.0	3.2	(0.1	)	5.1

(1)Measures presented for Allstate brand exclude the Company’s Canadian operations.

(2)Refer to the Allstate Brand Domestic Operating Measures and Statistics page for descriptions of these measures.

20

THE ALLSTATE CORPORATION

PROPERTY-LIABILITY

ALLSTATE BRAND DOMESTIC OPERATING MEASURES AND STATISTICS (1)

	Three months ended
	June 30,	March 31,	Dec. 31,	Sept. 30,	June 30,	March 31,
	2010	2010	2009	2009	2009	2009
Policies in Force (2)
(in thousands)
Standard auto	17,529	17,581	17,744	17,774	17,836	17,843
Non-standard auto	706	724	719	733	743	750
Auto	18,235	18,305	18,463	18,507	18,579	18,593
Homeowners	6,821	6,886	6,973	7,027	7,104	7,181
New Issued Applications (3)
(in thousands)
Standard auto	498	464	488	524	496	521
Non-standard auto	77	99	84	91	86	102
Auto	575	563	572	615	582	623
Homeowners	151	119	136	148	145	127
Average Premium - Gross Written ($) (4)
Standard auto	444	443	441	435	430	430
Non-standard auto	619	619	625	613	612	615
Auto	452	451	449	443	438	438
Homeowners	933	921	899	889	879	861
Average Premium - Net Earned ($)(5)
Standard auto	433	430	428	426	425	424
Non-standard auto	573	571	574	578	583	591
Auto	439	436	434	432	431	431
Homeowners	803	795	785	771	768	771
Renewal Ratio (%) (6)
Standard auto	89.0	88.8	88.8	89.1	89.0	88.6
Non-standard auto	72.5	71.8	72.4	72.6	73.3	71.6
Auto	88.3	88.0	88.1	88.3	88.3	87.8
Homeowners	88.3	88.0	88.4	88.5	88.0	87.5
Bodily Injury Claim Frequency
(% change year-over-year)
Standard auto	4.2	5.4	14.4	19.6	13.6	5.5
Non-standard auto	1.4	6.6	16.7	29.5	26.3	15.9
Auto	3.9	5.4	14.4	20.1	14.2	5.9
Property Damage Claim Frequency
(% change year-over-year)
Standard auto	1.9	(0.1)	7.6	10.7	5.1	1.6
Non-standard auto	0.8	3.1	9.4	16.5	10.2	7.1
Auto	1.8	-	7.7	10.9	5.3	1.7
Auto Paid Severity
(% change year-over-year)
Bodily injury	(1.0)	(1.3)	(4.9)	(0.9)	0.9	2.1
Property damage	(1.5)	0.4	0.1	(1.0)	0.5	(2.4)
Homeowners Excluding Catastrophe Losses
(% change year-over-year)
Claim frequency	1.7	5.1	13.9	13.5	3.9	5.1
Claim severity	(0.7)	(2.1)	(8.5)	9.0	7.0	3.2

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

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

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

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

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

21

THE ALLSTATE CORPORATION

HOMEOWNERS SUPPLEMENTAL INFORMATION

($ in millions)

		Six months ended June 30, 2010
										Premium rate changes (5)
											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	$	34	$	36	105.9%	$	3	8.8%
Other hurricane exposure states		1,557		1,382	88.8%		591	38.0%
Total hurricane exposure states  (2)		1,591		1,418	89.1%		594	37.3%		11	10.3%
Other catastrophe exposure states		1,437		1,155	80.4%		484	33.7%		16	7.9%
Total	$	3,028	$	2,573	85.0%	$	1,078	35.6%	41	27	9.3%

		1992 to 2009 Historical Information								1992 to 2009 Historical Information (Adjusted for Industry Reinsurance or Insurance Mechanism)
								Effect of								Effect of
		Earned		Incurred			Catastrophe	catastrophes		Earned		Incurred			Catastrophe	catastrophes	Number of
Primary Exposure Groupings (1)		premiums		losses	Loss ratios		losses	on loss ratio		premiums (4)		losses (3)	Loss ratios (3)		losses (3)	on loss ratio (3)	catastrophes
Florida	$	3,563	$	5,037	141.4%	$	3,552	99.7%	$	3,672	$	3,255	88.6%	$	1,770	48.2%
Other hurricane exposure states		38,580		30,965	80.3%		10,957	28.4%		38,649		30,897	79.9%		10,889	28.2%
Total hurricane exposure states (2)		42,143		36,002	85.4%		14,509	34.4%		42,321		34,152	80.7%		12,659	29.9%
Other catastrophe exposure states		35,898		26,982	75.2%		8,223	22.9%		35,898		25,141	70.0%		6,382	17.8%
Total	$	78,041	$	62,984	80.7%	$	22,732	29.1%	$	78,219	$	59,293	75.8%	$	19,041	24.3%	1,183

(1)Basis of Presentation

This homeowners supplemental information schedule displays financial results for the homeowners business (defined to include standard homeowners, scheduled personal property and other than primary residence lines) for the period 1992 through 2010.  The premiums and losses are presented on a GAAP basis with adjustments as indicated in Notes 3 and 4.  Each state in which the Company writes business has been categorized into one of two exposure groupings (Hurricane or Other).   Hurricane exposure states are comprised of those states in which hurricanes are the primary catastrophe exposure. However, the catastrophe losses for these states include losses due to other kinds of catastrophes.  A catastrophe is defined by Allstate as an event that produces pre-tax losses before reinsurance in excess of $1 million, and involves multiple first party policyholders, or an event that produces a number of claims in excess of a preset per-event threshold of average claims in a specific area, occurring within a certain amount of time following the event.

(2)Hurricane Exposure States

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

(3) Incurred Losses

Incurred losses (which include catastrophe losses) and Catastrophe losses, exclude the effects of those events for which the exposure is now covered, at least in part, by permanent industry reinsurance or insurance mechanism (i.e., Florida Hurricane Catastrophe Fund ("FHCF"), California Earthquake Authority) or with Hawaii hurricanes, coverage is being brokered to a non-affiliated insurance company.  Mechanisms such as the FHCF and external reinsurance are available and are reflected in our capital structure and help mitigate exposure to these types of events.   For the period 1992 - 2009, Incurred losses and Catastrophe losses for the Hurricane exposure states were adjusted to exclude $1.8 billion for losses related to Hurricane Andrew.  Incurred losses and Catastrophe losses for the Other catastrophe exposure states were adjusted to exclude an additional $1.8 billion for losses related to certain California earthquakes and Hawaii hurricanes.  Subsequent catastrophes of a similar magnitude are not excluded from the exhibit.  Through the use of the insurance mechanisms, Allstate may have a contingent liability for industry assessments and losses exceeding the claims paying capacity of these mechanisms as discussed in the Annual Report on Form 10-K.

(4)Earned Premiums

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

(5)Premium Rate Changes

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

22

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
1992 (3)	3.2	7.1	48.7	25.5	21.2	$	15,542	$		3,301	$	680	4.4
1993 (3)	5.8	3.0	1.2	3.8	3.4	16,039		547			607		3.8
1994 (3)	27.4	4.4	9.5	7.3	12.0	16,513		1,989			529		3.2
1995	4.0	7.8	3.8	5.0	5.2	17,540		905			683		3.9
1996	5.1	6.0	6.4	3.8	5.4	18,366		983			837		4.6
1997	2.4	2.6	2.6	0.3	2.0	18,604		365			325		1.7
1998	2.5	6.3	3.9	3.4	4.0	19,307		780			615		3.2
1999	2.6	5.6	5.4	2.7	4.1	20,112		816			623		3.1
2000	7.0	6.7	1.7	2.3	4.4	21,871		967			930		4.3
2001	1.5	9.8	2.5	2.4	4.0	22,197		894			763		3.4
2002	1.9	5.0	1.6	4.0	3.1	23,361		731			638		2.7
2003	2.2	9.2	6.1	6.5	6.0	24,677		1,489			1,256		5.1
2004	1.6	3.8	26.0	6.2	9.5	25,989		2,468			467		1.8
2005	2.5	2.2	69.4	9.6	21.0	27,039		5,674			460		1.7
2006	1.6	3.7	2.5	4.1	3.0	27,369		810			1,044		3.8
2007	2.4	6.3	5.0	7.0	5.2	27,233		1,409			1,336		4.9
2008	8.4	10.3	26.8	3.9	12.4	26,967		3,342			1,876		7.0
2009	7.8	12.5	6.2	5.0	7.9	26,194		2,069			2,159		8.2
2010	10.0	9.8	-	-	9.9	13,016		1,284			1,284		9.9
Average (2)	5.0	6.6	13.4	5.5	7.6								4.2
	Excludes the effect of catastrophe losses relating to
	Hurricane Andrew, California Earthquakes,					Premiums		Total
	and Hawaii Hurricanes (1)					earned		catastrophe
	Quarter 1	Quarter 2	Quarter 3	Quarter 4	Year	year-to-date		losses by year
1992 (3)	3.2	7.0	4.5	2.9	4.4	$	15,542	$	681
1993 (3)	5.6	3.0	1.5	5.1	3.8	16,039		607
1994 (3)	5.1	3.8	1.7	2.5	3.2	16,513		535
1995	4.0	7.7	1.8	5.0	4.6	17,540		843
1996	5.1	6.0	6.4	3.8	5.4	18,366		991
1997	2.4	2.6	1.8	0.3	1.8	18,604		329
1998	2.0	6.3	3.9	2.2	3.6	19,307		695
1999	2.6	5.6	5.4	2.3	3.9	20,112		790
2000	7.0	6.7	1.5	1.8	4.3	21,871		930
2001	1.5	8.1	2.5	1.7	3.5	22,197		769
2002	1.8	5.0	1.6	3.6	3.0	23,361		706
2003	2.1	9.0	6.1	6.4	5.9	24,677		1,458
2004	1.6	3.8	26.0	6.2	9.5	25,989		2,468
2005	2.5	2.2	69.4	9.6	21.0	27,039		5,674
2006	1.6	3.7	2.5	4.1	3.0	27,369		810
2007	2.4	6.3	5.0	7.0	5.2	27,233		1,409
2008	8.4	10.3	26.8	3.9	12.4	26,967		3,342
2009	7.8	12.5	6.2	5.0	7.9	26,194		2,069
2010	10.0	9.8	-	-	9.9	13,016		1,284
Average (2)	4.1	6.4	11.2	4.3	6.5

(1)The effect of Catastrophe losses on the combined ratio is presented excluding the effects of those events for which the exposure is now covered by an industry reinsurance or insurance mechanism (i.e., Florida Hurricane Catastrophe Fund and California Earthquake Authority) or with Hawaii hurricanes, coverage is being brokered to a non-affiliated insurance company (see the “Commitments, Guarantees and Contingent Liabilities” footnote to the Consolidated Financial Statements).

(2)The effect of Catastrophes and Catastrophes excluding extraordinary catastrophes on the Combined Ratio calculated as an average for all periods since 1992.

(3)The years 1992-1994 have been adjusted to exclude the premiums earned of the PMI Group, a mortgage guarantee insurer that was sold in 1995.

23

THE ALLSTATE CORPORATION

ALLSTATE PROTECTION HISTORICAL CATASTROPHE BY SIZE OF EVENT

($ in millions, except ratios)

Three months ended June 30, 2010
										Average
	Number				Claim and			Combined		catastrophe
Size of catastrophe	of events				claim expense			ratio impact		loss per event
Greater than $250 million	-	-	%	$	-	-	%	-	$	-
$101 million to $250 million	1	3.3			111	17.5		1.7		111
$50 million to $100 million	4	13.3			259	40.7		4.0		65
Less than $50 million	25	83.4			388	61.0		5.9		16
Total	30	100.0	%		758	119.2		11.6		25
Prior year reserve reestimates					(83)	(13.1)		(1.2)
Prior quarter reserve reestimates					(39)	(6.1)		(0.6)
Total catastrophe losses				$	636	100.0	%	9.8

Six months ended June 30, 2010
										Average
	Number				Claim and			Combined		Catastrophe
Size of catastrophe	of events				claim expense			ratio impact		loss per event
Greater than $250 million	-	-	%	$	-	-	%	-	$	-
$101 million to $250 million	3	7.3			473	36.8		3.6		158
$50 million to $100 million	7	17.1			435	33.9		3.4		62
Less than $50 million	31	75.6			474	36.9		3.6		15
Total	41	100.0	%		1,382	107.6		10.6		34
Prior year reserve reestimates					(98)	(7.6)		(0.7)
Total catastrophe losses				$	1,284	100.0	%	9.9

1995 through June 2010
	Principal										Average
	state with	Number				Claim and			Combined		catastrophe
Size of catastrophe	loss	of events				claim expense			ratio impact		loss per event
Greater than $250 million (1)
Hurricane Katrina - 2005	LA				$	3,592	14.4	%	1.0	$	3,592
Hurricane Rita - 2005	TX					900	3.6		0.3		900
Hurricane Ike - 2008	TX					880	3.5		0.2		880
Hurricane Ivan - 2004	FL					632	2.5		0.2		632
Hurricane Charley - 2004	FL					604	2.4		0.2		604
Hurricane Frances - 2004	FL					549	2.2		0.2		549
Hurricane Wilma - 2005	FL					540	2.2		0.2		540
Hurricane Jeanne - 2004	FL					337	1.3		0.1		337
October 2003 Fires	CA					300	1.2		-		300
Hurricane Gustav - 2008	LA					274	1.1		-		274
Greater than $250 million		10	1.0	%		8,608	34.4		2.4		861
$101 million to $250 million		19	1.8			2,945	11.8		0.8		155
$50 million to $100 million		54	5.2			3,750	15.0		1.0		69
Less than $50 million		952	92.0			9,683	38.8		2.7		10
Total		1,035	100.0	%	$	24,986	100.0	%	6.9		24

(1)Catastrophe claims and claims expense of $2.26 billion related to Hurricane Andrew of 1992 and $2.08 billion related to the Northridge earthquake of 1994, which were incurred prior to 1995, are excluded from the table above.

24

THE ALLSTATE CORPORATION

PROPERTY-LIABILITY

EFFECT OF PRE-TAX PRIOR YEAR RESERVE REESTIMATES ON THE COMBINED RATIO

($ in millions, except ratios)

	Three months ended																				Six months ended
			June 30,			March 31,			Dec. 31,			Sept. 30,			June 30,			March 31,			June 30,			June 30,
			2010			2010			2009			2009			2009			2009			2010			2009
Pre-tax Reserve Reestimates (1)
Auto		$	(85	)	$	5		$	(29	)	$	11		$	(4	)	$	(35	)	$	(80	)	$	(39	)
Homeowners			(61	)		(8	)		(50	)		(75	)		(11	)		(32	)		(69	)		(43	)
Other personal lines			(5	)		(22	)		51			(3	)		32			9			(27	)		41
Allstate Protection (2)			(151	)		(25	)		(28	)		(67	)		17			(58	)		(176	)		(41	)
Discontinued Lines and Coverages			1			2			3			15			3			3			3			6
Property-Liability		$	(150	)	$	(23	)	$	(25	)	$	(52	)	$	20		$	(55	)	$	(173	)	$	(35	)
Allstate brand		$	(152	)	$	(34	)	$	(20	)	$	(74	)	$	9		$	(41	)	$	(186	)	$	(32	)
Encompass brand			1			9			(8	)		7			8			(17	)		10			(9	)
Allstate Protection (2)		$	(151	)	$	(25	)	$	(28	)	$	(67	)	$	17		$	(58	)	$	(176	)	$	(41	)
Effect of Pre-tax Reserve
Reestimates on Combined Ratio (1)
Auto			(1.3	)		0.1			(0.4	)		0.2			-			(0.5	)		(0.6	)		(0.3	)
Homeowners			(0.9	)		(0.1	)		(0.8	)		(1.2	)		(0.2	)		(0.5	)		(0.6	)		(0.3	)
Other personal lines			(0.1	)		(0.4	)		0.8			-			0.5			0.1			(0.2	)		0.3
Allstate Protection (2)			(2.3	)		(0.4	)		(0.4	)		(1.0	)		0.3			(0.9	)		(1.4	)		(0.3	)
Discontinued Lines and Coverages			-			-			-			0.3			-			0.1			0.1			-
Property-Liability			(2.3	)		(0.4	)		(0.4	)		(0.7	)		0.3			(0.8	)		(1.3	)		(0.3	)
Allstate brand			(2.3	)		(0.5	)		(0.3	)		(1.1	)		0.2			(0.6	)		(1.5	)		(0.2	)
Encompass brand			-			0.1			(0.1	)		0.1			0.1			(0.3	)		0.1			(0.1	)
Allstate Protection (2)			(2.3	)		(0.4	)		(0.4	)		(1.0	)		0.3			(0.9	)		(1.4	)		(0.3	)

(1)Favorable reserve reestimates are shown in parentheses.

(2)Favorable reserve reestimates included in catastrophe losses totaled $83 million in the three months ended June 30, 2010, compared to unfavorable reserve reestimates included in catastrophe losses of $1 million in the three months ended June 30, 2009.  Favorable reserve reestimates included in catastrophe losses totaled $98 million and $59 million in the six months ended June 30, 2010 and 2009, respectively.

25

THE ALLSTATE CORPORATION

ASBESTOS AND ENVIRONMENTAL RESERVES

($ in millions)

		Three months ended						Twelve months ended December 31,
		June 30,			March 31,
		2010			2010			2009			2008			2007			2006			2005
(net of reinsurance)
Asbestos claims
Beginning reserves	$	1,157		$	1,180		$	1,228		$	1,302		$	1,375		$	1,373		$	1,464
Incurred claims and claims expense		-			-			(8	)		8			17			86			139
Claims and claims expense paid		(15	)		(23	)		(40	)		(82	)		(90	)		(84	)		(230	)
Ending reserves	$	1,142		$	1,157		$	1,180		$	1,228		$	1,302		$	1,375		$	1,373
Claims and claims expense paid as a percent of ending reserves		1.3	%		2.0	%		3.4	%		6.7	%		6.9	%		6.1	%		16.8	%
Environmental claims
Beginning reserves	$	197		$	198		$	195		$	232		$	194		$	205		$	232
Incurred claims and claims expense		-			-			13			-			63			10			2
Claims and claims expense paid		(7	)		(1	)		(10	)		(37	)		(25	)		(21	)		(29	)
Ending reserves	$	190		$	197		$	198		$	195		$	232		$	194		$	205
Claims and claims expense paid as a percent of ending reserves		3.7	%		0.5	%		5.1	%		19.0	%		10.8	%		10.8	%		14.1	%

26

THE ALLSTATE CORPORATION

ALLSTATE FINANCIAL RESULTS

($ in millions)

	Three months ended																				Six months ended
			June 30,			March 31,			Dec. 31,			Sept. 30,			June 30,			March 31,			June 30,			June 30,
			2010			2010			2009			2009			2009			2009			2010			2009
Investments		$	61,804		$	62,336		$	62,216		$	61,891		$	59,861		$	59,576		$	61,804		$	59,861
Premiums and deposits *		$	1,018		$	1,105		$	1,156		$	1,033		$	1,399		$	1,533		$	2,123		$	2,932
Deposits to contractholder funds			(739	)		(828	)		(898	)		(802	)		(1,152	)		(1,298	)		(1,567	)		(2,450	)
Deposits to separate accounts			(25	)		(26	)		(27	)		(27	)		(28	)		(28	)		(51	)		(56	)
Change in unearned premiums and other adjustments			32			38			12			28			29			39			70			68
Life and annuity premiums			286			289			243			232			248			246			575			494
Contract charges			259			255			255			250			246			238			514			484
Premiums and contract charges			545			544			498			482			494			484			1,089			978
Net investment income			723			731			737			744			764			819			1,454			1,583
Periodic settlements and accruals on non-hedge derivative instruments			11			17			14			2			(3	)		1			28			(2	)
Contract benefits			(485	)		(442	)		(441	)		(382	)		(407	)		(387	)		(927	)		(794	)
Interest credited to contractholder funds			(450	)		(463	)		(479	)		(497	)		(520	)		(542	)		(913	)		(1,062	)
Amortization of deferred policy acquisition costs			(41	)		(58	)		(90	)		(108	)		(130	)		(109	)		(99	)		(239	)
Operating costs and expenses			(116	)		(120	)		(105	)		(99	)		(105	)		(121	)		(236	)		(226	)
Restructuring and related charges			1			-			(1	)		(4	)		(2	)		(18	)		1			(20	)
Income tax expense on operations			(63	)		(70	)		(38	)		(43	)		(26	)		(42	)		(133	)		(68	)
Operating income			125			139			95			95			65			85			264			150
Realized capital gains and losses, after-tax			(230	)		(105	)		(178	)		(151	)		82			(170	)		(335	)		(88	)
DAC and DSI accretion (amortization) relating to realized capital gains and losses, after-tax			4			(2	)		(45	)		18			(131	)		(19	)		2			(150	)
DAC and DSI unlocking relating to realized capital gains and losses, after-tax			-			(18	)		-			-			-			(224	)		(18	)		(224	)
Reclassification of periodic settlements and accruals on non-hedge derivative instruments, after-tax			(7	)		(11	)		(9	)		(1	)		2			(1	)		(18	)		1
Gain on disposition of operations, after-tax			1			1			-			1			1			2			2			3
Net (loss) income		$	(107	)	$	4		$	(137	)	$	(38	)	$	19		$	(327	)	$	(103	)	$	(308	)

27

THE ALLSTATE CORPORATION

ALLSTATE FINANCIAL PREMIUMS AND DEPOSITS

($ in millions)

	Three months ended														Six months ended
			June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,		June 30,		June 30,
PREMIUMS AND DEPOSITS - BY PRODUCT			2010		2010		2009		2009		2009		2009		2010		2009
Underwritten Products
Interest-sensitive life		$	387	$	389	$	384	$	355	$	356	$	341	$	776	$	697
Traditional			105		99		121		102		101		92		204		193
Accident, health, and other			148		157		121		115		114		110		305		224
			640		645		626		572		571		543		1,285		1,114
Annuities
Indexed annuities			120		122		155		105		117		127		242		244
Fixed deferred annuities			77		111		141		196		471		452		188		923
Sub-total			197		233		296		301		588		579		430		1,167
Fixed immediate annuities			69		86		73		56		81		90		155		171
			266		319		369		357		669		669		585		1,338
Bank deposits			112		141		161		104		159		321		253		480
Total		$	1,018	$	1,105	$	1,156	$	1,033	$	1,399	$	1,533	$	2,123	$	2,932
PREMIUMS AND DEPOSITS - BY DISTRIBUTION CHANNEL
Allstate agencies		$	523	$	542	$	647	$	558	$	576	$	735	$	1,065	$	1,311
Financial institutions			40		102		105		115		329		347		142		676
Independent agents			369		360		320		342		368		327		729		695
Specialized brokers and other			86		101		84		18		126		124		187		250
Total		$	1,018	$	1,105	$	1,156	$	1,033	$	1,399	$	1,533	$	2,123	$	2,932

28

THE ALLSTATE CORPORATION

CHANGE IN CONTRACTHOLDER FUNDS

($ in millions)

	Three months ended																				Six months ended
			June 30,			March 31,			Dec. 31,			Sept. 30,			June 30,			March 31,			June 30,			June 30,
			2010			2010			2009			2009			2009			2009			2010			2009
Beginning balance		$	51,027		$	52,582		$	53,336		$	53,999		$	56,621		$	58,413		$	52,582		$	58,413
Deposits
Fixed annuities			237			291			351			343			635			635			528			1,270
Interest-sensitive life insurance			391			395			384			355			357			342			786			699
Bank and other deposits			234			252			275			208			268			427			486			695
Total deposits			862			938			1,010			906			1,260			1,404			1,800			2,664
Interest credited			448			462			481			498			515			531			910			1,046
Maturities, benefits, withdrawals and other adjustments
Maturities and retirements of institutional products			(827	)		(954	)		(58	)		(212	)		(2,552	)		(1,951	)		(1,781	)		(4,503	)
Benefits			(395	)		(395	)		(353	)		(379	)		(406	)		(450	)		(790	)		(856	)
Surrenders and partial withdrawals			(1,355	)		(1,248	)		(1,540	)		(1,184	)		(1,235	)		(1,213	)		(2,603	)		(2,448	)
Contract charges			(243	)		(241	)		(238	)		(232	)		(227	)		(221	)		(484	)		(448	)
Net transfers from separate accounts			3			2			3			2			2			4			5			6
Fair value hedge adjustments for institutional products			(74	)		(123	)		(6	)		1			78			(48	)		(197	)		30
Other adjustments			(3	)		4			(53	)		(63	)		(57	)		152			1			95
Total maturities, benefits, withdrawals and other adjustments			(2,894	)		(2,955	)		(2,245	)		(2,067	)		(4,397	)		(3,727	)		(5,849	)		(8,124	)
Ending balance		$	49,443		$	51,027		$	52,582		$	53,336		$	53,999		$	56,621		$	49,443		$	53,999

29

THE ALLSTATE CORPORATION

ALLSTATE FINANCIAL ANALYSIS OF NET INCOME

($ in millions)

	Three months ended																				Six months ended
			June 30,			March 31,			Dec. 31,			Sept. 30,			June 30,			March 31,			June 30,			June 30,
			2010			2010			2009			2009			2009			2009			2010			2009
Benefit spread
Premiums		$	286		$	289		$	243		$	232		$	248		$	246		$	575		$	494
Cost of insurance contract charges (1)			159			156			158			156			150			152			315			302
Contract benefits excluding the implied interest on immediate annuities with life contingencies(2)			(346	)		(303	)		(301	)		(243	)		(267	)		(248	)		(649	)		(515	)
Total benefit spread			99			142			100			145			131			150			241			281
Investment spread
Net investment income			723			731			737			744			764			819			1,454			1,583
Implied interest on immediate annuities with life contingencies (2)			(139	)		(139	)		(140	)		(139	)		(140	)		(139	)		(278	)		(279	)
Interest credited to contractholder funds			(450	)		(463	)		(490	)		(496	)		(561	)		(579	)		(913	)		(1,140	)
Total investment spread			134			129			107			109			63			101			263			164
Surrender charges and contract maintenance expense fees (1)			100			99			97			94			96			86			199			182
Realized capital gains and losses			(353	)		(162	)		(275	)		(234	)		121			(43	)		(515	)		78
Amortization of deferred policy acquisition costs			(35	)		(89	)		(148	)		(80	)		(289	)		(448	)		(124	)		(737	)
Operating costs and expenses			(116	)		(120	)		(105	)		(99	)		(105	)		(121	)		(236	)		(226	)
Restructuring and related charges			1			-			(1	)		(4	)		(2	)		(18	)		1			(20	)
Gain on disposition of operations			2			1			1			2			1			3			3			4
Income tax benefit (expense) on operations			61			4			87			29			3			(37	)		65			(34	)
Net (loss) income		$	(107	)	$	4		$	(137	)	$	(38	)	$	19		$	(327	)	$	(103	)	$	(308	)
Benefit spread by product group
Life insurance		$	23		$	88		$	68		$	96		$	96		$	103		$	111		$	199
Accident and health			60			64			47			50			50			49			124			99
Annuities			16			(10	)		(15	)		(1	)		(15	)		(2	)		6			(17	)
Total benefit spread		$	99		$	142		$	100		$	145		$	131		$	150		$	241		$	281
Investment spread by product group
Annuities and institutional products		$	54		$	50		$	45		$	44		$	3		$	34		$	104		$	37
Life insurance			6			7			1			(2	)		7			(3	)		13			4
Allstate Bank products			8			8			9			8			7			6			16			13
Accident and health			4			4			3			5			4			4			8			8
Net investment income on investments supporting capital			62			60			49			54			42			60			122			102
Total investment spread		$	134		$	129		$	107		$	109		$	63		$	101		$	263		$	164
(1) Reconciliation of contract charges
Cost of insurance contract charges		$	159		$	156		$	158		$	156		$	150		$	152		$	315		$	302
Surrender charges and contract maintenance expense fees			100			99			97			94			96			86			199			182
Total contract charges		$	259		$	255		$	255		$	250		$	246		$	238		$	514		$	484
(2) Reconciliation of contract benefits
Contract benefits excluding the implied interest on immediate annuities with life contingencies		$	(346	)	$	(303	)	$	(301	)	$	(243	)	$	(267	)	$	(248	)	$	(649	)	$	(515	)
Implied interest on immediate annuities with life contingencies			(139	)		(139	)		(140	)		(139	)		(140	)		(139	)		(278	)		(279	)
Total contract benefits		$	(485	)	$	(442	)	$	(441	)	$	(382	)	$	(407	)	$	(387	)	$	(927	)	$	(794	)

30

THE ALLSTATE CORPORATION

ALLSTATE FINANCIAL WEIGHTED AVERAGE INVESTMENT SPREADS

	Three months ended June 30, 2010						Three months ended June 30, 2009
	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	5.5	%	4.4	%	1.1	%	5.4	%	4.5	%	0.9		%
Deferred fixed annuities and institutional products	4.5		3.2		1.3		4.5		3.5		1.0
Immediate fixed annuities with and without life contingencies	6.5		6.4		0.1		6.3		6.5		(0.2	)
Investments supporting capital, traditional life and other products	3.7		N/A		N/A		2.9		N/A		N/A

	Six months ended June 30, 2010						Six months ended June 30, 2009
	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	5.5	%	4.4	%	1.1	%	5.4	%	4.6	%	0.8		%
Deferred fixed annuities and institutional products	4.5		3.2		1.3		4.6		3.4		1.2
Immediate fixed annuities with and without life contingencies	6.5		6.4		0.1		6.3		6.5		(0.2	)
Investments supporting capital, traditional life and other products	3.7		N/A		N/A		3.5		N/A		N/A

31

THE ALLSTATE CORPORATION

CORPORATE AND OTHER RESULTS

($ in millions)

	Three months ended																				Six months ended
			June 30,			March 31,			Dec. 31,			Sept. 30,			June 30,			March 31,			June 30,			June 30,
			2010			2010			2009			2009			2009			2009			2010			2009
Net investment income		$	16		$	15		$	15		$	14		$	10		$	13		$	31		$	23
Operating costs and expenses			(101	)		(97	)		(108	)		(109	)		(103	)		(90	)		(198	)		(193	)
Income tax benefit on operations			33			32			36			37			36			32			65			68
Operating loss			(52	)		(50	)		(57	)		(58	)		(57	)		(45	)		(102	)		(102	)
Realized capital gains and losses, after-tax			5			2			5			3			5			(2	)		7			3
Net loss		$	(47	)	$	(48	)	$	(52	)	$	(55	)	$	(52	)	$	(47	)	$	(95	)	$	(99	)

32

THE ALLSTATE CORPORATION

INVESTMENTS

($ in millions)

	PROPERTY-LIABILITY											ALLSTATE FINANCIAL
			June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,
			2010		2010		2009		2009		2009		2010		2010		2009		2009		2009
Fixed income securities, at fair value:
Tax-exempt		$	12,067	$	13,181	$	14,294	$	15,507	$	16,894	$	64	$	64	$	64	$	65	$	63
Taxable			17,089		15,552		12,991		12,930		10,164		50,483		50,246		49,222		47,815		44,890
Equity securities, at fair value			3,063		3,580		4,840		4,414		3,118		191		227		184		189		179
Mortgage loans			38		50		50		78		98		7,135		7,589		7,885		8,775		9,308
Limited partnership interests			2,014		1,744		1,674		1,714		1,389		1,067		1,023		1,032		1,021		1,040
Short-term, at fair value			655		608		503		588		1,303		947		1,074		1,697		1,785		2,162
Other			139		94		174		127		235		1,917		2,113		2,132		2,241		2,219
Total		$	35,065	$	34,809	$	34,526	$	35,358	$	33,201	$	61,804	$	62,336	$	62,216	$	61,891	$	59,861
Fixed income securities, at amortized cost:
Tax-exempt		$	11,804	$	13,041	$	14,177	$	15,117	$	17,320	$	60	$	60	$	60	$	61	$	61
Taxable			17,097		15,793		13,414		13,404		11,077		50,301		51,392		51,435		50,592		50,711
Ratio of fair value to amortized cost			100.9%		99.6%		98.9%		99.7%		95.3%		100.4%		97.8%		95.7%		94.5%		88.5%
Equity securities, at cost		$	3,175	$	3,253	$	4,685	$	4,106	$	3,300	$	181	$	183	$	160	$	168	$	183
Short-term, at amortized cost			655		608		503		588		1,303		947		1,074		1,697		1,785		2,162
			CORPORATE AND OTHER										CONSOLIDATED
			June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		June 30,		March 31,		Dec. 31,		Sept 30,		June 30,
			2010		2010		2009		2009		2009		2010		2010		2009		2009		2009
Fixed income securities, at fair value:
Tax-exempt		$	613	$	652	$	670	$	766	$	752	$	12,744	$	13,897	$	15,028	$	16,338	$	17,709
Taxable			1,609		1,589		1,525		1,478		3		69,181		67,387		63,738		62,223		55,057
Equity securities, at fair value			-		-		-		-		-		3,254		3,807		5,024		4,603		3,297
Mortgage loans			-		-		-		-		-		7,173		7,639		7,935		8,853		9,406
Limited partnership interests			38		35		38		35		35		3,119		2,802		2,744		2,770		2,464
Short-term, at fair value			812		800		856		1,097		2,605		2,414		2,482		3,056		3,470		6,070
Other			2		2		2		1		1		2,058		2,209		2,308		2,369		2,455
Total		$	3,074	$	3,078	$	3,091	$	3,377	$	3,396	$	99,943	$	100,223	$	99,833	$	100,626	$	96,458
Fixed income securities, at amortized cost:
Tax-exempt		$	582	$	619	$	632	$	719	$	718	$	12,446	$	13,720	$	14,869	$	15,897	$	18,099
Taxable			1,581		1,581		1,525		1,474		3		68,979		68,766		66,374		65,470		61,791
Ratio of fair value to amortized cost			102.7%		101.9%		101.8%		102.3%		104.7%		100.6%		98.5%		97.0%		96.6%		91.1%
Equity securities, at cost		$	-	$	-	$	-	$	-	$	-	$	3,356	$	3,436	$	4,845	$	4,274	$	3,483
Short-term, at amortized cost			812		800		856		1,097		2,605		2,414		2,482		3,056		3,470		6,070

33

THE ALLSTATE CORPORATION

FIXED INCOME SECURITY PORTFOLIO BY CREDIT RATING(1)

($ in millions)

			PROPERTY-LIABILITY										ALLSTATE FINANCIAL
NAIC			June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,
Rating	Credit rating		2010		2010		2009		2009		2009		2010		2010		2009		2009		2009
1	Aaa/Aa/A	$	23,422	$	22,814	$	21,714	$	22,281	$	21,170	$	32,128	$	32,371	$	31,676	$	30,922	$	29,369
2	Baa		3,388		3,691		3,517		4,080		3,854		14,991		14,742		14,681		13,909		12,995
3	Ba		896		858		849		914		964		1,608		1,686		1,635		1,625		1,716
4	B		572		602		506		489		514		694		648		571		754		438
5	Caa or lower		520		511		552		557		440		665		522		628		593		356
6	In or near default		358		257		147		116		116		461		341		95		77		79
Total		$	29,156	$	28,733	$	27,285	$	28,437	$	27,058	$	50,547	$	50,310	$	49,286	$	47,880	$	44,953
			CORPORATE AND OTHER										CONSOLIDATED
NAIC			June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,
Rating	Credit rating		2010		2010		2009		2009		2009		2010		2010		2009		2009		2009
1	Aaa/Aa/A	$	2,218	$	2,235	$	2,183	$	2,229	$	733	$	57,768	$	57,420	$	55,573	$	55,432	$	51,272
2	Baa		4		6		11		12		19		18,383		18,439		18,209		18,001		16,868
3	Ba		-		-		-		-		-		2,504		2,544		2,484		2,539		2,680
4	B		-		-		-		2		2		1,266		1,250		1,077		1,245		954
5	Caa or lower		-		-		-		-		-		1,185		1,033		1,180		1,150		796
6	In or near default		-		-		1		1		1		819		598		243		194		196
Total		$	2,222	$	2,241	$	2,195	$	2,244	$	755	$	81,925	$	81,284	$	78,766	$	78,561	$	72,766

(1)The Valuation of Securities Taskforce of the NAIC instituted a new process to be used by insurance companies during the fourth quarter of 2009 for statutory accounting, reporting and estimating risk-based capital requirements for non-agency RMBS, and as a result the NAIC ratings used for statutory reporting may differ from those shown above. The credit ratings shown here represent the external rating equivalent  to the displayed NAIC rating.

34

THE ALLSTATE CORPORATION

UNREALIZED NET CAPITAL GAINS AND LOSSES ON SECURITY PORTFOLIO BY TYPE

($ in millions)

		June 30, 2010					March 31, 2010					December 31, 2009
		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)
SECURITIES BY TYPE
Fixed income securities
U.S. government and agencies	$	512	$	9,185	105.9	$	218	$	8,422	102.7	$	203	$	7,536	102.8
Municipal		89		18,849	100.5		(256)		20,148	98.7		(403)		21,280	98.1
Corporate		1,445		35,935	104.2		914		34,499	102.7		345		33,115	101.1
Foreign government		350		3,252	112.1		306		3,314	110.2		291		3,197	110.0
Residential mortgage-backed securities (“RMBS”)		(954)		8,961	90.4		(1,231)		9,112	88.1		(1,500)		7,987	84.2
Commercial mortgage-backed securities (“CMBS”)		(553)		2,132	79.4		(768)		2,452	76.1		(925)		2,586	73.7
Asset-backed securities (“ABS”)		(390)		3,572	90.2		(387)		3,297	89.5		(488)		3,026	86.1
Redeemable preferred stock		1		39	102.6		2		40	105.3		-		39	100.0
Total fixed income securities		500		81,925	100.6		(1,202)		81,284	98.5		(2,477)		78,766	97.0
Equity securities		(102)		3,254	97.0		371		3,807	110.8		179		5,024	103.7
Short-term investments		-		2,414	100.0		-		2,482	100.0		-		3,056	100.0
Derivatives		2		283	100.7		(18)		437	96.0		(23)		548	96.0
Unrealized net capital gains and losses, pre-tax	$	400	$	87,876	100.5	$	(849)	$	88,010	99.0	$	(2,321)	$	87,394	97.4
Amounts recognized for:
Insurance reserves (2)		(292)					-					-
DAC and DSI (3)		403					726					990
Amounts recognized		111					726					990
Deferred income taxes		(183)					39					461
Unrealized net capital gains and losses, after-tax	$	328				$	(84)				$	(870)
		September 30, 2009					June 30, 2009					March 31, 2009
		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)
SECURITIES BY TYPE
Fixed income securities
U.S. government and agencies	$	255	$	8,132	103.2	$	253	$	4,185	106.4	$	516	$	3,979	114.9
Municipal		39		22,167	100.2		(1,025)		23,097	95.8		(1,225)		22,097	94.7
Corporate		206		32,059	100.6		(1,550)		29,938	95.1		(3,452)		28,309	89.1
Foreign government		330		2,874	113.0		244		2,723	109.8		366		2,475	117.4
RMBS		(1,756)		8,077	82.1		(2,160)		7,503	77.6		(1,721)		6,307	78.6
CMBS		(1,159)		2,578	69.0		(1,746)		3,237	65.0		(2,044)		3,661	64.2
ABS		(720)		2,637	78.6		(1,134)		2,051	64.4		(1,313)		1,587	54.7
Redeemable preferred stock		(1)		37	97.4		(6)		32	84.2		(11)		23	67.6
Total fixed income securities		(2,806)		78,561	96.6		(7,124)		72,766	91.1		(8,884)		68,438	88.5
Equity securities		329		4,603	107.7		(186)		3,297	94.7		(537)		2,410	81.8
Short-term investments		-		3,470	100.0		-		6,070	100.0		1		8,125	100.0
Derivatives		(24)		538	95.7		(15)		449	96.8		16		432	103.8
Unrealized net capital gains and losses, pre-tax	$	(2,501)	$	87,172	97.2	$	(7,325)	$	82,582	91.9	$	(9,404)	$	79,405	89.4
Amounts recognized for:
Insurance reserves (2)		-					-					-
DAC and DSI (3)		2,679					4,064					3,785
Amounts recognized		2,679					4,064					3,785
Deferred income taxes		(66)					1,149					1,852
Unrealized net capital gains and losses, after-tax	$	112				$	(2,112)				$	(3,767)

(1)Comparing percentages from period to period may be distorted by investment transactions such as sales, purchases and impairment write-downs.

(2)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.

(3)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.  Only the unrealized net capital gains and losses on the Allstate Financial fixed annuity and interest-sensitive life product portfolios are used in this calculation.  The reduction in unrealized net capital losses in the first quarter and second quarter of 2010 for these product portfolios was less than the reduction in unrealized net capital losses for the total Allstate Financial and consolidated portfolios.  The DAC and DSI adjustment balance, subject to limitations, is determined by applying the DAC and DSI amortization rate to unrealized net capital gains or losses.  Recapitalization of the DAC and DSI balances is limited to the originally deferred costs plus interest.  The DAC adjustment balance (88% of the total DAC and DSI adjustment balance) was limited as of March 31, 2009 because the calculated amount, when added to the DAC balance before the impact of unrealized capital gains and losses, was greater than originally deferred costs plus interest.  The DSI adjustment balance was limited as of March 31, 2009, June 30, 2009 and September 30, 2009.  In periods subsequent to the adjustment balance reaching the limitation, the change in the adjustment will not trend in a linear relationship with the change in unrealized gains and losses until such time as the adjustment balance is below the limitation.  The DAC and DSI adjustment balance was below the limitation as of December 31, 2009, March 31, 2010 and June 30, 2010.  The limitation amount changes from period to period based on changes in the DAC and DSI balance before the impact of unrealized capital gains and losses, as well as new deferrals and interest.

35

THE ALLSTATE CORPORATION

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

($ in millions)

		As of June 30, 2010
											Amortized
											cost as a		Fair value
		Par		Amortized		Gross unrealized				Fair	percent of		as a percent
		value (1)		cost		Gains		Losses		value	par value (2)		of par value (2)
Corporate:
Banking	$	4,113	$	3,965	$	110	$	(225)	$	3,850	96.4	%	93.6	%
Financial services		3,450		3,340		138		(51)		3,427	96.8		99.3
Consumer goods (cyclical and non-cyclical)		5,415		5,457		348		(42)		5,763	100.8		106.4
Utilities		6,037		6,042		472		(34)		6,480	100.1		107.3
Transportation		1,704		1,721		112		(34)		1,799	101.0		105.6
Energy		2,254		2,262		124		(28)		2,358	100.4		104.6
Capital goods		3,676		3,673		255		(21)		3,907	99.9		106.3
Basic industry		1,513		1,536		84		(13)		1,607	101.5		106.2
Communications		2,059		2,034		112		(11)		2,135	98.8		103.7
Technology		1,196		1,204		78		(8)		1,274	100.7		106.5
FDIC guaranteed		1,977		1,988		33		-		2,021	100.6		102.2
Other		1,408		1,268		63		(17)		1,314	90.1		93.3
Total corporate fixed income portfolio		34,802		34,490		1,929		(484)		35,935	99.1		103.3
U.S. government and agencies		9,306		8,673		512		-		9,185	93.2		98.7
Municipal		23,546		18,760		663		(574)		18,849	79.7		80.1
Foreign government		3,307		2,902		362		(12)		3,252	87.8		98.3
RMBS		10,601		9,915		228		(1,182)		8,961	93.5		84.5
CMBS		2,745		2,685		47		(600)		2,132	97.8		77.7
ABS		4,361		3,962		85		(475)		3,572	90.9		81.9
Redeemable preferred stock		48		38		1		-		39	79.2		81.3
Total fixed income securities	$	88,716	$	81,425	$	3,827	$	(3,327)	$	81,925	91.8		92.3

(1)Included in par value are zero-coupon securities that are generally purchased at a deep discount to the par value that is received at maturity.  These primarily included corporate, municipal, foreign government and U.S. government and agencies zero-coupon securities with par value of $867 million, $6.94 billion, $1.19 billion and $1.65 billion, respectively.

(2)Excluding the impact of zero-coupon securities, the percentage of amortized cost to par value would be 99.6% for corporates, 99.6% for municipals, 104.1% for foreign governments and 102.0% for U.S. government and agencies.  Similarly, excluding the impact of zero-coupon securities, the percentage of fair value to par value would be 103.7% for corporates, 101.1% for municipals, 109.1% for foreign governments and 105.7% for U.S. government and agencies.

36

THE ALLSTATE CORPORATION

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

($ in millions)

		As of June 30, 2010
		Aaa				Aa				A				Baa				Ba or lower				Total
		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized		Par		Fair		Unrealized
		value		gain/(loss)		value		gain/(loss)		value		gain/(loss)		value		gain/(loss)		value		gain/(loss)		value		value		gain/(loss)
U.S. government and agencies	$	9,185	$	512	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	9,306	$	9,185	$	512
Municipal
Tax exempt		1,401		100		5,896		229		3,370		68		1,440		(37)		636		(62)		13,781		12,743		298
Taxable		144		7		2,568		69		1,328		(30)		576		(84)		162		(65)		8,331		4,778		(103)
Auction rate securities		971		(46)		97		(11)		114		(20)		43		(8)		103		(21)		1,434		1,328		(106)
Corporate
Public		2,489		57		2,736		129		6,525		455		8,207		492		1,251		(1)		19,997		21,208		1,132
Privately placed		997		46		1,677		86		3,448		192		6,335		181		1,086		13		13,368		13,543		518
Hybrid		34		4		32		5		510		(95)		462		(105)		146		(14)		1,437		1,184		(205)
Foreign government		1,887		271		447		18		495		44		417		16		6		1		3,307		3,252		350
RMBS
U.S. government sponsored entities		5,256		193		-		-		-		-		-		-		-		-		4,986		5,256		193
Prime residential mortgage-backed securities		547		(6)		92		(10)		226		(8)		21		(6)		517		(21)		1,532		1,403		(51)
Alt-A residential mortgage-backed securities		43		(1)		69		(8)		129		(9)		49		(7)		435		(142)		1,146		725		(167)
Subprime residential mortgage-backed securities		108		(6)		301		(138)		182		(62)		102		(33)		884		(690)		2,937		1,577		(929)
CMBS		1,328		(9)		230		(44)		265		(126)		185		(181)		124		(193)		2,745		2,132		(553)
ABS
Collateralized debt obligations		13		(1)		595		(21)		500		(98)		252		(96)		389		(181)		2,499		1,749		(397)
Consumer and other asset-backed securities		1,019		22		279		3		234		(7)		260		(6)		31		(5)		1,862		1,823		7
Redeemable preferred stock		-		-		-		-		3		1		32		-		4		-		48		39		1
Total fixed income securities	$	25,422	$	1,143	$	15,019	$	307	$	17,329	$	305	$	18,381	$	126	$	5,774	$	(1,381)	$	88,716	$	81,925	$	500

37

THE ALLSTATE CORPORATION

REALIZED CAPITAL GAINS AND LOSSES BY TRANSACTION TYPE

($ in millions)

	Three months ended																				Six months ended
			June 30,			March 31,			Dec. 31,			Sept. 30,			June 30,			March 31,			June 30,			June 30,
			2010			2010			2009			2009			2009			2009			2010			2009
Impairment write-downs (1)		$	(239	)	$	(223	)	$	(270	)	$	(381	)	$	(291	)	$	(620	)	$	(462	)	$	(911	)
Change in intent write-downs (2)			(67	)		(32	)		(215	)		(11	)		(26	)		(105	)		(99	)		(131	)
Net other-than-temporary impairment losses recognized in earnings			(306	)		(255	)		(485	)		(392	)		(317	)		(725	)		(561	)		(1,042	)
Sales			145			88			390			201			263			418			233			681
Valuation of derivative instruments			(283	)		(155	)		166			(269	)		367			103			(438	)		470
Settlements of derivative instruments			(27	)		(30	)		(110	)		(92	)		52			(12	)		(57	)		40
EMA limited partnership income			20			4			6			33			(37	)		(143	)		24			(180	)
Total		$	(451	)	$	(348	)	$	(33	)	$	(519	)	$	328		$	(359	)	$	(799	)	$	(31	)

(1)Beginning April 1, 2009 for fixed income securities, impairment write-downs reflect the credit loss component of issue specific other-than-temporary declines in fair value where the amortized cost basis is not expected to be entirely recovered.  For periods prior to April 1, 2009 for fixed income securities and all periods for equity securities, impairment write-downs reflect issue specific other-than-temporary declines in fair value, including instances where the Company could not reasonably assert that the recovery period would be temporary.

(2)Beginning April 1, 2009 for fixed income securities, change in intent write-downs reflect instances where the Company has made a decision to sell the security or it is more likely than not the Company will be required to sell the security before recovery of its amortized cost basis.  For periods prior to April 1, 2009 for fixed income securities and all periods for equity securities, change in intent write-downs reflect instances where the Company could not assert a positive intent to hold until recovery.

38

THE ALLSTATE CORPORATION

PROPERTY-LIABILITY

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

($ in millions)

	Three months ended																				Six months ended
			June 30,			March 31,			Dec. 31,			Sept. 30,			June 30,			March 31,			June 30,			June 30,
			2010			2010			2009			2009			2009			2009			2010			2009
NET INVESTMENT INCOME
Fixed income securities:
Tax-exempt		$	153		$	165		$	180		$	204		$	217		$	225		$	318		$	442
Taxable			143			130			126			120			111			109			273			220
Equity securities			23			20			29			13			18			15			43			33
Mortgage loans			-			1			-			2			1			1			1			2
Limited partnership interests (3)			3			3			4			2			2			1			6			3
Short-term			1			1			2			1			1			3			2			4
Other			5			1			1			2			-			1			6			1
Sub-total			328			321			342			344			350			355			649			705
Less: Investment expense			(18	)		(17	)		(18	)		(18	)		(16	)		(11	)		(35	)		(27	)
Net investment income		$	310		$	304		$	324		$	326		$	334		$	344		$	614		$	678
Net investment income, after-tax		$	249		$	247		$	266		$	273		$	282		$	290		$	496		$	572
PRE-TAX YIELDS (1)
Fixed income securities:
Tax-exempt			4.9			4.9			4.9			5.0			5.0			5.2			4.9			5.1
Equivalent yield for tax-exempt			7.1			7.1			7.1			7.3			7.3			7.6			7.1			7.4
Taxable			3.5			3.5			3.7			3.9			4.2			4.7			3.5			4.5
Equity securities			2.9			2.0			2.7			1.5			2.2			2.1			2.3			2.1
Mortgage loans			5.4			6.0			5.0			4.5			4.5			4.5			5.8			4.5
Limited partnership interests			0.6			0.8			0.8			0.6			0.4			0.3			0.7			0.4
Total portfolio (2)			3.8			3.7			3.9			3.9			4.1			4.3			3.7			4.2
REALIZED CAPITAL GAINS AND LOSSES (PRE-TAX) BY ASSET TYPE
Fixed income securities:
Tax-exempt		$	(23	)	$	(4	)	$	(12	)	$	27		$	9		$	(28	)	$	(27	)	$	(19	)
Taxable			6			(43	)		(40	)		-			(3	)		(7	)		(37	)		(10	)
Equity securities			25			14			336			(22	)		26			(138	)		39			(112	)
Limited partnership interests			15			(7	)		19			11			(30	)		(164	)		8			(194	)
Derivatives and other			(129	)		(150	)		(68	)		(306	)		199			23			(279	)		222
Total		$	(106	)	$	(190	)	$	235		$	(290	)	$	201		$	(314	)	$	(296	)	$	(113	)
REALIZED CAPITAL GAINS AND LOSSES (PRE-TAX) BY TRANSACTION TYPE
Impairment write-downs		$	(96	)	$	(79	)	$	(91	)	$	(100	)	$	(87	)	$	(256	)	$	(175	)	$	(343	)
Change in intent write-downs (4)			(10	)		(9	)		(6	)		(10	)		(1	)		(72	)		(19	)		(73	)
Net other-than-temporary impairment losses recognized in earnings			(106	)		(88	)		(97	)		(110	)		(88	)		(328	)		(194	)		(416	)
Sales (4)			121			41			377			91			93			50			162			143
Valuation of derivative instruments			(134	)		(101	)		53			(209	)		188			20			(235	)		208
Settlements of derivative instruments			3			(49	)		(121	)		(99	)		11			6			(46	)		17
EMA limited partnership income			10			7			23			37			(3	)		(62	)		17			(65	)
Total		$	(106	)	$	(190	)	$	235		$	(290	)	$	201		$	(314	)	$	(296	)	$	(113	)

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

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

(3)At June 30, 2010, we have commitments to invest in additional limited partnership interests totaling $702 million.

(4)Includes $6 million and $7 million of write-downs for equity securities effectively carried on a lower of cost or fair value basis because we do not intend to hold them until recovery for the three months and six months ended June 30, 2010, respectively.

39

THE ALLSTATE CORPORATION

ALLSTATE FINANCIAL

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

($ in millions)

	Three months ended																				Six months ended
			June 30,			March 31,			Dec. 31,			Sept. 30,			June 30,			March 31,			June 30,			June 30,
			2010			2010			2009			2009			2009			2009			2010			2009
NET INVESTMENT INCOME
Fixed income securities		$	646		$	652		$	657		$	654		$	658		$	699		$	1,298		$	1,357
Equity securities			2			1			1			2			1			1			3			2
Mortgage loans			99			103			109			119			130			136			202			266
Limited partnership interests (3)			4			3			2			2			2			2			7			4
Short-term			-			1			1			2			2			7			1			9
Other			-			(2	)		(4	)		(7	)		(4	)		(1	)		(2	)		(5	)
Sub-total			751			758			766			772			789			844			1,509			1,633
Less: Investment expense			(28	)		(27	)		(29	)		(28	)		(25	)		(25	)		(55	)		(50	)
Net investment income		$	723		$	731		$	737		$	744		$	764		$	819		$	1,454		$	1,583
Net investment income, after-tax		$	473		$	478		$	480		$	489		$	500		$	535		$	951		$	1,035
PRE-TAX YIELDS (1)
Fixed income securities			5.1			5.1			5.2			5.2			5.3			5.6			5.1			5.4
Equity securities			3.5			2.3			3.7			3.1			4.8			2.9			2.9			3.7
Mortgage loans			5.4			5.3			5.2			5.3			5.5			5.5			5.4			5.5
Limited partnership interests			1.8			1.0			1.0			0.6			0.7			0.8			1.4			0.8
Total portfolio (2)			4.8			4.7			4.7			4.7			4.8			5.0			4.8			4.9
REALIZED CAPITAL GAINS AND LOSSES (PRE-TAX) BY ASSET TYPE
Fixed income securities		$	(177	)	$	(92	)	$	(342	)	$	(64	)	$	2		$	140		$	(269	)	$	142
Equity securities			20			-			2			1			1			(25	)		20			(24	)
Mortgage loans			(28	)		(25	)		(30	)		(66	)		(16	)		(32	)		(53	)		(48	)
Limited partnership interests			9			(15	)		(26	)		(32	)		(53	)		(171	)		(6	)		(224	)
Derivatives and other			(177	)		(30	)		121			(73	)		187			45			(207	)		232
Total		$	(353	)	$	(162	)	$	(275	)	$	(234	)	$	121		$	(43	)	$	(515	)	$	78
REALIZED CAPITAL GAINS AND LOSSES (PRE-TAX) BY TRANSACTION TYPE
Impairment write-downs		$	(143	)	$	(144	)	$	(179	)	$	(281	)	$	(204	)	$	(357	)	$	(287	)	$	(561	)
Change in intent write-downs			(57	)		(23	)		(209	)		(1	)		(25	)		(33	)		(80	)		(58	)
Net other-than-temporary impairment losses recognized in earnings			(200	)		(167	)		(388	)		(282	)		(229	)		(390	)		(367	)		(619	)
Sales			18			44			10			106			163			359			62			522
Valuation of derivative instruments			(149	)		(54	)		113			(60	)		179			83			(203	)		262
Settlements of derivative instruments			(30	)		19			11			7			41			(18	)		(11	)		23
EMA limited partnership income			8			(4	)		(21	)		(5	)		(33	)		(77	)		4			(110	)
Total		$	(353	)	$	(162	)	$	(275	)	$	(234	)	$	121		$	(43	)	$	(515	)	$	78

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

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

(3)At June 30, 2010, we have commitments to invest in additional limited partnership interests totaling $721 million.

40

Definitions of Non-GAAP and Operating Measures

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

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

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

- amortization of DAC and deferred sales inducements (“DSI”), to the extent they resulted from the recognition of certain realized capital gains and losses,

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

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

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

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

Combined ratio excluding the effect of catastrophes is a non-GAAP ratio, which is computed as the difference between two GAAP operating ratios:  the combined ratio and the effect of catastrophes on the combined ratio.  The most directly comparable GAAP measure is the combined ratio. We believe that this ratio is useful to investors and it is used by management to reveal the trends in our Property-Liability business that may be obscured by catastrophe losses.  These catastrophe losses cause our loss trends to vary significantly between periods as a result of their incidence of occurrence and magnitude and can have a significant impact on the combined ratio.  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 and prior year reserve reestimates (“underlying combined ratio”) is a non-GAAP ratio, which is computed as the difference between three GAAP operating ratios: the combined ratio, the effect of catastrophes on the combined ratio and the effect of prior year reserve reestimates 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 and prior year reserve reestimates.  These catastrophe losses cause our loss trends to vary significantly between periods as a result of their incidence of occurrence and magnitude, and can have a significant impact on the combined ratio.  Prior year reserve reestimates are caused by unexpected loss development on historical reserves.  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 2009 combined ratio excluding the effect of catastrophe losses and prior year reserve reestimates.  The combined ratio excluding the effect of catastrophes and prior year reserve reestimates should not be considered a substitute for the combined ratio and does not reflect the overall underwriting profitability of our business.  A reconciliation of the combined ratio excluding the effect of catastrophes and prior year reserve reestimates to combined ratio is provided in the schedule, “Property-Liability Results”.

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

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

Operating Measures

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

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

Premiums and deposits is an operating measure that we use to analyze production trends for Allstate Financial sales.  It includes premiums on insurance policies and annuities and all deposits and other funds received from customers on deposit-type products including the net new deposits of Allstate Bank, which we account for under GAAP as increases to liabilities rather than as revenue.  An illustration of where premiums and deposits are reflected in the consolidated financial statements is included in the schedule, “Allstate Financial Results”.

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

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

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

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

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

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

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

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

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

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

41