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) February 9, 2011

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):

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

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

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

o Pre-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 February 9, 2011, the registrant issued a press release announcing its financial results for the fourth quarter of 2010, and the availability of the registrant’s fourth 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 February 9, 2011

99.2Fourth 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: February 9, 2011

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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 Reports Operating Results Within Outlook

and Improved Book Value per Share for 2010

NORTHBROOK, Ill., February 9, 2011 – The Allstate Corporation (NYSE: ALL) today reported financial results for the fourth quarter and full year 2010:

The Allstate Corporation Consolidated Highlights
	Three months ended December 31,						Twelve months ended December 31,
($ in millions, except per share amounts and ratios)	2010	2009		% Change			2010	2009		% Change
Consolidated revenues	$8,087		$  8,058		0.4		$31,400		$  32,013		(1.9	)
Net income	296		518		(42.9	)	928		854		8.7
Net income per diluted share	0.55		0.96		(42.7	)	1.71		1.58		8.2
Operating income*	271		592		(54.2	)	1,539		1,881		(18.2	)
Operating income per diluted share*	0.50		1.09		(54.1	)	2.84		3.48		(18.4	)
Book value per share							35.32		30.84		14.5
Book value per share, excluding the impact of unrealized net capital gains and losses on fixed income securities*							34.26		32.62		5.0
Catastrophe losses	537		328		63.7		2,207		2,069		6.7
Property-Liability combined ratio	100.8		93.2		7.6 pts		98.1		96.2		1.9 pts
Property-Liability combined ratio excluding the effect of catastrophes and prior year reserve reestimates (“underlying combined ratio”)*	92.0		88.1		3.9 pts		89.6		88.1		1.5 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.

“Allstate made continued progress on our business strategies in 2010 to position the company for long-term growth,” said Thomas J. Wilson, chairman, president and chief executive officer of The Allstate Corporation.  “Allstate Protection’s profitability was within our annual outlook for the year but continued to be negatively impacted by high catastrophe losses and increased frequency of auto insurance claims.  While we were able to increase auto insurance new business levels at the end of the year, this was not enough to offset lower customer renewals reflecting actions to maintain auto profitability in several large states.  Allstate Financial successfully completed the ‘Focus to Win’ restructuring and is shifting its focus to underwritten products sold through Allstate agencies and the workplace.  We also recently announced our intentions to wind down Allstate Ba nk.  Our investment strategies were well timed and executed as we continued to stay long corporate credit while reducing our municipal bond and real estate portfolios.  As a result, total investment returns were good although investment income was down for the year reflecting lower interest rates.

“Net income was $928 million for the year and book value per share at December 31, 2010 was 14.5% higher than prior year end,” continued Wilson.  “In November we commenced a $1 billion share repurchase program and acquired 5.2 million of our outstanding shares for $160 million by the end of the year.  Total shareholder return for 2010 was 8.8%.  We have the operating expertise, business platform and financial strength to continue to improve shareholder value in 2011.”

Consolidated Financial Results

Net income for the 2010 year was $928 million, or $1.71 per diluted share, compared to $854 million in 2009.  The increase was due to improved investment results and higher operating income from Allstate Financial, partially offset by lower Property-Liability operating income.  Total operating income was $1.5 billion, or $2.84 per diluted share, in 2010 compared to $1.9 billion, or $3.48 per diluted share, in 2009.

Allstate’s fourth quarter 2010 net income was $296 million, or $0.55 per diluted share, compared to $518 million, or $0.96 per diluted share, in the fourth quarter of 2009.  Total operating income was $271 million, or $0.50 per diluted share, in the fourth quarter of 2010 compared to $592 million, or $1.09 per diluted share, in the same period of 2009.

Property-Liability 2010 Underlying Combined Ratio Within Full Year Outlook

Allstate’s Property-Liability business produced an underlying combined ratio of 89.6 for 2010, within the company’s full-year outlook range of 88 to 90 announced at the beginning of 2010.  The recorded combined ratio for the year was 98.1, 1.9 points higher than 2009.  Management’s priority is to maintain the profitability of the auto business and improve homeowners profitability, which results in an outlook for the 2011 underlying combined ratio of 88 to 91.

The Property-Liability underlying combined ratio was 92.0 in the fourth quarter of 2010 compared to 88.1 in the same period of 2009, primarily due to increased claim frequencies and a higher expense ratio.  The recorded combined ratio was 100.8 for the fourth quarter of 2010, compared to 93.2 for the fourth quarter of 2009.

Catastrophe losses remained high, reinforcing the importance of Allstate’s strategy to improve the profitability of the homeowners business.  Catastrophe losses were $537 million during the fourth quarter of 2010, reflecting 20 events, including an Arizona hailstorm with estimated losses of $355 million.  This compares to catastrophe losses of $328 million for the fourth quarter of 2009.  Catastrophe losses added 8.3 points to the combined ratio during the fourth quarter of 2010.

Allstate brand standard auto premiums written declined 0.4% for the fourth quarter of 2010 compared to the prior year fourth quarter.  This decline was driven by a 1.5% decline in policies in force, reflecting a 0.4 point decline in retention to 88.4%, partly offset by a 7.8% increase in new issued applications.  Profitability actions in several large states were the primary cause of the decline in retention.  Average premium was consistent with the fourth quarter of 2009.  The Allstate brand standard auto combined ratio was 99.7, an increase of 6.0 points from the fourth quarter of 2009, due to increasing claim frequencies and, to a lesser extent, higher expenses which were primarily related to the successful Mayhem advertising campaign.

Allstate brand homeowners premiums written for the fourth quarter of 2010 increased 2.2% compared to the same period a year ago, as a 7.1% increase in average premium was partly offset by a 4.1% decline in policies in force.  Rate increases averaging 7.4% in 10 states were approved during the fourth quarter, as Allstate took actions to improve homeowners returns.  The Allstate brand homeowners combined ratio was 102.0 in the fourth quarter of 2010 compared to 89.0 in the fourth quarter a year ago, primarily due to higher catastrophe losses and lower favorable prior year reserve reestimates.  Favorable prior year reserve reestimates not related to catastrophe losses were $7 million in the fourth quarter of 2010 compared to $37 million in the prior year quarter.

Allstate Financial Makes Progress on Strategy, Improves Results in 2010

Allstate Financial made significant progress during 2010 on its goals to produce higher returns, reduce concentrations in products with returns dependent on investment spread and serve its customers by focusing on Allstate agencies and Allstate Benefits (formerly, the Allstate Workplace Division).  In keeping with these goals, this week Allstate announced its intention to wind down the Allstate Bank.

Consistent with this strategy, premiums and contract charges on mortality and morbidity (underwritten) products increased 9.0% when compared to the fourth quarter of 2009, while premiums and deposits* on

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annuities declined by 47.7% compared to the prior year quarter.

Allstate Financial operating income was $104 million in the fourth quarter of 2010 compared to $95 million in the prior year fourth quarter.  The increase was due to a higher benefit spread and lower amortization of deferred acquisition costs (DAC), partly offset by higher operating costs and expenses.  The benefit spread increased 27.0% from the 2009 fourth quarter due to growth in Allstate Benefits and non-recurring benefit costs recorded in the 2009 quarter.  DAC amortization declined primarily due to lower gross profits on fixed annuities.  Operating costs and expenses rose due primarily to litigation costs in 2010 and an increase in certain acquisition-related expenses related to growth at Allstate Benefits.  For the year, Allstate Financial generated operating income of $476 million, an increase of $136 million from 2009.

Net income of $76 million in the fourth quarter of 2010, versus a net loss of $137 million in the 2009 quarter, reflected lower after-tax net realized capital losses.

Allstate’s Investment Portfolio Ends 2010 in a Strong Position

Allstate continues to proactively manage its investment portfolio with the goal of reducing risk and optimizing returns.  During 2010, the declining yield environment contributed to strong investment returns, but also decreased net investment income.  Net investment income of $4.1 billion for 2010 was a decrease from 2009 of 7.7%.

As part of the risk reduction strategy, Allstate reduced its municipal fixed income securities and commercial real estate by $5.5 billion and $2.3 billion of amortized cost, respectively, during 2010.  During the fourth quarter, municipal fixed income securities declined by $165 million and commercial real estate declined by $248 million as a result of sales, collections and purchases of new positions.

Allstate’s consolidated investment portfolio was $100.5 billion at December 31, 2010, $650 million higher than the end of 2009, as strong investment returns more than offset impacts from risk reduction actions and reductions in Allstate Financial’s contractholder funds.  The portfolio declined $1.7 billion during the fourth quarter of 2010, as rising interest rates lowered the fixed income portfolio valuations, yet were partly offset by increased equity valuations.  The net unrealized capital gain totaled $1.4 billion, pre-tax, at December 31, 2010 compared to a $2.7 billion pre-tax gain at September 30, 2010.  For the year, this was an improvement of $3.7 billion from a net unrealized capital loss of $2.3 billion, pre-tax, at the end of 2009.

Net investment income was $998 million for the fourth quarter of 2010.  This was a 0.7% decline from the third quarter of 2010 and a 7.2% decline from the fourth quarter of 2009, due to reinvestment at lower interest rates, risk reduction actions and lower contractholder funds.

Net realized capital gains for the fourth quarter of 2010 were $116 million, pre-tax, a reversal from the net realized capital loss of $33 million, pre-tax, in the prior year fourth quarter.  The improvement was the result of lower other-than-temporary impairment losses and higher derivative gains, partly offset by lower gains on sales.  Other-than-temporary impairment losses of $273 million for the fourth quarter of 2010 were comprised of impairment write-downs of $198 million and write-downs related to the company’s intent to sell certain securities in future periods of $75 million, both primarily related to real estate and municipal bond exposures.

Derivative net gains of $179 million in the fourth quarter of 2010 were primarily driven by Allstate’s risk management actions and exposures embedded in fixed income securities.  Rising interest rates and equity markets during the quarter resulted in derivative gains of $129 million from the interest rate hedging programs and $55 million from equity exposures embedded in fixed income securities.

Book Value per Share Increased 14.5% During 2010

“The combination of an improved net unrealized position and net income increased book value per share by 14.5% during 2010,” said Don Civgin, senior vice president and chief financial officer.  “During the fourth quarter, we repurchased $160 million of our stock as part of the $1 billion share repurchase program.”

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Book value per share totaled $35.32 at December 31, 2010 compared to $35.48 at September 30, 2010 and $30.84 at December 31, 2009.  Fourth quarter 2010 book value per share declined from the third quarter of 2010, as lower shareholders’ equity was partly offset by the impact of the share repurchase program.

Statutory surplus at December 31, 2010 was an estimated $15.3 billion for Allstate Insurance Company, including $3.3 billion at Allstate Life Insurance Company.  This compares to Allstate Insurance Company statutory surplus of $15.2 billion at September 30, 2010 and $15.0 billion at December 31, 2009.  Deployable assets at the holding company level increased to $3.8 billion at December 31, 2010, and reflected $700 million of dividends from Allstate Insurance Company during the fourth quarter and $1.3 billion during 2010.

*     *     *     *     *

Visit www.allstateinvestors.com to view additional information about Allstate’s fourth quarter results, including a webcast of its quarterly conference call and the presentation discussed on the call.  The conference call will be held at 9 a.m. ET on Thursday, February 10, 2011.

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 nearly 16 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®.< /font>

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THE ALLSTATE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

($ in millions, except per share data)		Three months endedDecember 31,						Twelve months endedDecember 31,
		2010			2009			2010			2009
		(unaudited)						(unaudited)
Revenues
Property-liability insurance premiums	$	6,442		$	6,517		$	25,957		$	26,194
Life and annuity premiums and contract charges		531			498			2,168			1,958
Net investment income		998			1,076			4,102			4,444
Realized capital gains and losses:
Total other-than-temporary impairment losses		(300	)		(641	)		(937	)		(2,376	)
Portion of loss recognized in other comprehensive income		27			156			(64	)		457
Net other-than-temporary impairment losses recognized in earnings		(273	)		(485	)		(1,001	)		(1,919	)
Sales and other realized capital gains and losses		389			452			174			1,336
Total realized capital gains and losses		116			(33	)		(827	)		(583	)
		8,087			8,058			31,400			32,013
Costs and expenses
Property-liability insurance claims and claims expense		4,842			4,451			18,951			18,746
Life and annuity contract benefits		443			441			1,815			1,617
Interest credited to contractholder funds		449			490			1,807			2,126
Amortization of deferred policy acquisition costs		1,065			1,105			4,034			4,754
Operating costs and expenses		835			760			3,281			3,007
Restructuring and related charges		(3	)		18			30			130
Interest expense		92			101			367			392
		7,723			7,366			30,285			30,772
(Loss) gain on disposition of operations		(1	)		1			11			7
Income from operations before income tax expense		363			693			1,126			1,248
Income tax expense		67			175			198			394
Net income	$	296		$	518		$	928		$	854
Earnings per share:
Net income per share - Basic	$	0.55		$	0.96		$	1.72		$	1.58
Weighted average shares - Basic		539.5			539.9			540.3			539.6
Net income per share - Diluted	$	0.55		$	0.96		$	1.71		$	1.58
Weighted average shares - Diluted		542.0			542.1			542.5			540.9
Cash dividends declared per share	$	0.20		$	0.20		$	0.80		$	0.80

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THE ALLSTATE CORPORATION

SEGMENT RESULTS

($ in millions, except ratios)		Three months ended						Twelve months ended
		December 31,						December 31,
		2010			2009			2010			2009
Property-Liability
Premiums written	$	6,242		$	6,277		$	25,907		$	25,971
Premiums earned	$	6,442		$	6,517		$	25,957		$	26,194
Claims and claims expense		(4,842	)		(4,451	)		(18,951	)		(18,746	)
Amortization of deferred policy acquisition costs		(924	)		(957	)		(3,678	)		(3,789	)
Operating costs and expenses		(726	)		(648	)		(2,800	)		(2,559	)
Restructuring and related charges		1			(17	)		(33	)		(105	)
Underwriting (loss) income		(49	)		444			495			995
Net investment income		291			324			1,189			1,328
Periodic settlements and accruals on non-hedge derivative instruments		(3	)		(2	)		(7	)		(10	)
Income tax expense on operations		(33	)		(212	)		(423	)		(555	)
Operating income		206			554			1,254			1,758
Realized capital gains and losses, after-tax		54			151			(207	)		(222	)
(Loss) gain on disposition of operations, after-tax		(1	)		--			3			--
Reclassification of periodic settlements and accruals on non-hedge derivative instruments, after-tax		1			2			4			7
Net income	$	260		$	707		$	1,054		$	1,543
Catastrophe losses	$	537		$	328		$	2,207		$	2,069
Operating ratios:
Claims and claims expense ratio		75.2			68.3			73.0			71.6
Expense ratio		25.6			24.9			25.1			24.6
Combined ratio		100.8			93.2			98.1			96.2
Effect of catastrophe losses on combined ratio		8.3			5.0			8.5			7.9
Effect of prior year reserve reestimates on combined ratio		0.1			(0.4	)		(0.6	)		(0.4	)
Effect of catastrophe losses included in prior year reserve reestimates on combined ratio		(0.4	)		(0.5	)		(0.6	)		(0.6	)
Effect of Discontinued Lines and Coverages on combined ratio		0.1			0.1			0.1			0.1
Allstate Financial
Investments	$	61,582		$	62,216		$	61,582		$	62,216
Premiums and deposits	$	962		$	1,156		$	4,096		$	5,121
Premiums and contract charges	$	531		$	498		$	2,168		$	1,958
Net investment income		692			737			2,853			3,064
Periodic settlements and accruals on non-hedge derivative instruments		13			14			51			14
Contract benefits		(443	)		(441	)		(1,815	)		(1,617	)
Interest credited to contractholder funds		(439	)		(479	)		(1,798	)		(2,038	)
Amortization of deferred policy acquisition costs		(86	)		(90	)		(286	)		(437	)
Operating costs and expenses		(115	)		(105	)		(469	)		(430	)
Restructuring and related charges		2			(1	)		3			(25	)
Income tax expense on operations		(51	)		(38	)		(231	)		(149	)
Operating income		104			95			476			340
Realized capital gains and losses, after-tax		23			(178	)		(337	)		(417	)
DAC and DSI amortization relating to realized capital gains and losses, after-tax		(43	)		(45	)		(34	)		(177	)
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		(8	)		(9	)		(33	)		(9	)
Gain on disposition of operations, after-tax		--			--			4			4
Net income (loss)	$	76		$	(137	)	$	58		$	(483	)
Corporate and Other
Net investment income	$	15		$	15		$	60		$	52
Operating costs and expenses		(86	)		(108	)		(379	)		(410	)
Income tax benefit on operations		32			36			128			141
Operating loss		(39	)		(57	)		(191	)		(217	)
Realized capital gains and losses, after-tax		(1	)		5			7			11
Net loss	$	(40	)	$	(52	)	$	(184	)	$	(206	)
Consolidated net income	$	296		$	518		$	928		$	854

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THE ALLSTATE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

($ in millions, except par value data)		December 31,			December 31,
		2010			2009
Assets		(unaudited)
Investments:
Fixed income securities, at fair value (amortized cost $78,786 and $81,243)	$	79,612		$	78,766
Equity securities, at fair value (cost $4,228 and $4,845)		4,811			5,024
Mortgage loans		6,679			7,935
Limited partnership interests		3,816			2,744
Short-term, at fair value (amortized cost $3,279 and $3,056)		3,279			3,056
Other		2,286			2,308
Total investments		100,483			99,833
Cash		562			612
Premium installment receivables, net		4,839			4,839
Deferred policy acquisition costs		4,769			5,470
Reinsurance recoverables, net		6,552			6,355
Accrued investment income		809			864
Deferred income taxes		784			1,870
Property and equipment, net		921			990
Goodwill		874			875
Other assets		1,605			1,872
Separate Accounts		8,676			9,072
Total assets	$	130,874		$	132,652
Liabilities
Reserve for property-liability insurance claims and claims expense	$	19,468		$	19,167
Reserve for life-contingent contract benefits		13,482			12,910
Contractholder funds		48,195			52,582
Unearned premiums		9,800			9,822
Claim payments outstanding		737			742
Other liabilities and accrued expenses		5,564			5,726
Long-term debt		5,908			5,910
Separate Accounts		8,676			9,072
Total liabilities		111,830			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, 533 million and 537 million shares outstanding		9			9
Additional capital paid-in		3,176			3,172
Retained income		31,969			31,492
Deferred ESOP expense		(44	)		(47	)
Treasury stock, at cost (367 million and 363 million shares)		(15,910	)		(15,828	)
Accumulated other comprehensive income:
Unrealized net capital gains and losses:
Unrealized net capital losses on fixed income securities with OTTI		(190	)		(441	)
Other unrealized net capital gains and losses		1,089			(1,072	)
Unrealized adjustment to DAC, DSI and insurance reserves		36			643
Total unrealized net capital gains and losses		935			(870	)
Unrealized foreign currency translation adjustments		69			46
Unrecognized pension and other postretirement benefit cost		(1,188	)		(1,282	)
Total accumulated other comprehensive loss		(184	)		(2,106	)
Total shareholders’ equity		19,016			16,692
Noncontrolling interest		28			29
Total equity		19,044			16,721
Total liabilities and equity	$	130,874		$	132,652

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THE ALLSTATE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

($ in millions)		Twelve months ended December 31,
		2010			2009
Cash flows from operating activities		(unaudited)
Net income	$	928		$	854
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and other non-cash items		94			(91	)
Realized capital gains and losses		827			583
Gain on disposition of operations		(11	)		(7	)
Interest credited to contractholder funds		1,807			2,126
Changes in:
Policy benefits and other insurance reserves		238			(577	)
Unearned premiums		(40	)		(247	)
Deferred policy acquisition costs		(94	)		514
Premium installment receivables, net		10			26
Reinsurance recoverables, net		(265	)		(85	)
Income taxes		200			1,660
Other operating assets and liabilities		(5	)		(455	)
Net cash provided by operating activities		3,689			4,301
Cash flows from investing activities
Proceeds from sales
Fixed income securities		22,881			21,359
Equity securities		4,349			6,894
Limited partnership interests		505			369
Mortgage loans		124			340
Other investments		121			520
Investment collections
Fixed income securities		5,147			5,556
Mortgage loans		1,076			1,764
Other investments		137			117
Investment purchases
Fixed income securities		(25,745	)		(29,573	)
Equity securities		(3,564	)		(8,496	)
Limited partnership interests		(1,342	)		(784	)
Mortgage loans		(120	)		(26	)
Other investments		(181	)		(64	)
Change in short-term investments, net		(382	)		5,981
Change in other investments, net		(519	)		(340	)
Disposition of operations		7			12
Purchases of property and equipment, net		(162	)		(189	)
Net cash provided by investing activities		2,332			3,440
Cash flows from financing activities
Proceeds from issuance of long-term debt		--			1,003
Repayment of long-term debt		(2	)		(752	)
Contractholder fund deposits		2,980			4,150
Contractholder fund withdrawals		(8,470	)		(11,406	)
Dividends paid		(430	)		(542	)
Treasury stock purchases		(152	)		(4	)
Shares reissued under equity incentive plans, net		28			3
Excess tax benefits on share-based payment arrangements		(7	)		(5	)
Other		(18	)		9
Net cash used in financing activities		(6,071	)		(7,544	)
Net (decrease) increase in cash		(50	)		197
Cash at beginning of period		612			415
Cash at end of period	$	562		$	612

8

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 (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 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 a nd 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 operatin g 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 (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 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.

The following tables reconcile operating income and net income (loss) for the three months and twelve months ended December 31, 2010 and 2009.

For the three months ended  December 31,		Property-Liability				Allstate Financial				Consolidated				Per diluted share
($ in millions, except per share data)		2010		2009		2010		2009		2010		2009		2010		2009
Operating income	$	206	$	554	$	104	$	95	$	271	$	592	$	0.50	$	1.09
Realized capital gains and losses		82		235		36		(275)		116		(33)
Income tax (expense) benefit		(28)		(84)		(13)		97		(40)		11
Realized capital gains and losses, after-tax		54		151		23		(178)		76		(22)		0.14		(0.04)
DAC and DSI amortization relating to realized capital gains and losses, after-tax		--		--		(43)		(45)		(43)		(45)		(0.08)		(0.08)
Reclassification of periodic settlements and accruals on non-hedge derivative instruments, after-tax		1		2		(8)		(9)		(7)		(7)		(0.01)		(0.01)
Loss on disposition of operations, after-tax		(1)		--		--		--		(1)		--		--		--
Net income (loss)	$	260	$	707	$	76	$	(137)	$	296	$	518	$	0.55	$	0.96

9

For the twelve months ended  December 31,		Property-Liability				Allstate Financial				Consolidated				Per diluted share
($ in millions, except per share data)		2010		2009		2010		2009		2010		2009		2010		2009
Operating income	$	1,254	$	1,758	$	476	$	340	$	1,539	$	1,881	$	2.84	$	3.48
Realized capital gains and losses		(321)		(168)		(517)		(431)		(827)		(583)
Income tax benefit (expense)		114		(54)		180		14		290		(45)
Realized capital gains and losses, after-tax		(207)		(222)		(337)		(417)		(537)		(628)		(0.99)		(1.16)
DAC and DSI amortization relating to realized capital gains and losses, after-tax		--		--		(34)		(177)		(34)		(177)		(0.06)		(0.33)
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		4		7		(33)		(9)		(29)		(2)		(0.06)		--
Gain on disposition of operations, after-tax		3		--		4		4		7		4		0.01		0.01
Net income (loss)	$	1,054	$	1,543	$	58	$	(483)	$	928	$	854	$	1.71	$	1.58

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 busines s.  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 impa ct 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 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 December 31,		Twelve months ended December 31,
	2010	2009	2010	2009
Combined ratio excluding the effect of catastrophes and prior year reserve reestimates (“underlying combined ratio”)	92.0	88.1	89.6	88.1
Effect of catastrophe losses	8.3	5.0	8.5	7.9
Effect of prior year non-catastrophe reserve reestimates	0.5	0.1	--	0.2
Combined ratio	100.8	93.2	98.1	96.2
Effect of prior year catastrophe reserve reestimates	(0.4)	(0.5)	(0.6)	(0.6)

In this news release, we provide our outlook range on the 2011 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 valu ation technique.  Book value per share, excluding the impact of unrealized net capital gains and losses on fixed income securities, should not be

10

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 December 31,
		2010		2009
Book value per share
Numerator:
Shareholders’ equity	$	19,016	$	16,692
Denominator:
Shares outstanding and dilutive potential shares outstanding		538.4		541.3
Book value per share	$	35.32	$	30.84
Book value per share, excluding the impact of unrealized net capital gains and losses on fixed income securities
Numerator:
Shareholders’ equity	$	19,016	$	16,692
Unrealized net capital gains and losses on fixed income securities		573		(967)
Adjusted shareholders’ equity	$	18,443	$	17,659
Denominator:
Shares outstanding and dilutive potential shares outstanding		538.4		541.3
Book value per share, excluding the impact of unrealized net capital gains and losses on fixed income securities	$	34.26	$	32.62

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 Consolidated Statements of Financial Position.  A reconciliation of premiums written to premiums earned is presented in the following table.

($ in millions)		Three months ended December 31,				Twelve months ended December 31,
		2010		2009		2010		2009
Premiums written	$	6,242	$	6,277	$	25,907	$	25,971
Decrease in Property-Liability unearned premiums		203		248		19		200
Other		(3)		(8)		31		23
Premiums earned	$	6,442	$	6,517	$	25,957	$	26,194

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 consolidated financial statements.

($ in millions)		Three months ended December 31,				Twelve months ended December 31,
		2010		2009		2010		2009
Total premiums and deposits	$	962	$	1,156	$	4,096	$	5,121
Deposits to contractholder funds		(683)		(898)		(2,980)		(4,150)
Deposits to separate accounts		(25)		(27)		(101)		(110)
Change in unearned premiums and other adjustments		19		12		123		108
Life and annuity premiums (1)	$	273	$	243	$	1,138	$	969

________________________________________________________________

(1)Life and annuity contract charges in the amount of $258 million and $255 million for the three months ended December 31, 2010 and 2009, respectively, and $1.03 billion and $989 million for the twelve months ended December 31, 2010 and 2009, respectively, which are also revenues recognized for GAAP, have been excluded from the table above, but are a component of the 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 2011.  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 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 declin e 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.

# # # # #

11

EX-99.2

Exhibit 99.2

THE ALLSTATE CORPORATION

Investor Supplement

Fourth 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 - Fourth 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
Historical Summary of Consolidated Operating and Financial Position Data	11
Property-Liability Operations
Property-Liability Results	12
Historical Property-Liability Results	13
Underwriting Results by Area of Business	14
Historical Underwriting Results by Area of Business	15
Premiums Written by Market Segment	16
Allstate Protection Market Segment Analysis	17
Allstate Protection Historical Market Segment Analysis	18
Historical Impact of Net Rate Changes Approved on Premiums Written	19
Standard Auto Profitability Measures	20
Non-standard Auto Profitability Measures	21
Auto Profitability Measures	22
Homeowners Profitability Measures	23
Allstate Brand Domestic Operating Measures and Statistics	24
Homeowners Supplemental Information	25
Effect of Catastrophe Losses on the Combined Ratio	26
Allstate Protection Historical Catastrophe by Size of Event	27
Effect of Pre-tax Prior Year Reserve Reestimates on the Combined Ratio	28
Historical Pre-tax Prior Year Reserve Reestimate	29
Historical Property-Liability Loss Reserves	30
Asbestos and Environmental Reserves	31
Allstate Financial Operations and Reconciliations
Allstate Financial Results	32
Historical Allstate Financial Results	33
Premiums, Contract Charges and Deposits	34
Change in Contractholder Funds	35
Analysis of Net Income	36
Allstate Financial Weighted Average Investment Spreads	37
Corporate and Other Results	38
Investments
Investments	39
Unrealized Net Capital Gains and Losses on Security Portfolio by Type	40
Gross Unrealized Gains and Losses on Fixed Income Securities by Type and Sector	41
Fair Value and Unrealized Net Capital Gains and Losses for Fixed Income Securities by Credit Rating	42
Realized Capital Gains and Losses by Transaction Type	43
Property-Liability Net Investment Income, Yields and Realized Capital Gains and Losses (Pre-tax)	44
Allstate Financial Net Investment Income, Yields and Realized Capital Gains and Losses (Pre-tax)	45
Definitions of Non-GAAP and Operating Measures	46

THE ALLSTATE CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

($ in millions, except per share data)

	Three months ended																	Twelve months ended
		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Dec. 31,
		2010		2010		2010		2010		2009		2009		2009		2009 (1)		2010		2009
Revenues
Property-liability insurance premiums		$	6,442	$	6,499	$	6,513	$	6,503	$	6,517	$	6,535	$	6,560	$	6,582	$	25,957	$	26,194
Life and annuity premiums and contract charges		531		548		545		544		498		482		494		484		2,168		1,958
Net investment income		998		1,005		1,049		1,050		1,076		1,084		1,108		1,176		4,102		4,444
Realized capital gains and losses:
Total other-than-temporary impairment losses		(300)		(99)		(288)		(250)		(641)		(539)		(471)		(725)		(937)		(2,376)
Portion of loss recognized in other comprehensive income		27		(68)		(18)		(5)		156		147		154		-		(64)		457
Net other-than-temporary impairment losses recognized in earnings		(273)		(167)		(306)		(255)		(485)		(392)		(317)		(725)		(1,001)		(1,919)
Sales and other realized capital gains and losses		389		23		(145)		(93)		452		(127)		645		366		174		1,336
Total realized capital gains and losses		116		(144)		(451)		(348)		(33)		(519)		328		(359)		(827)		(583)
Total revenues		8,087		7,908		7,656		7,749		8,058		7,582		8,490		7,883		31,400		32,013
Costs and expenses
Property-liability insurance claims and claims expense		4,842		4,603		4,714		4,792		4,451		4,573		5,002		4,720		18,951		18,746
Life and annuity contract benefits		443		445		485		442		441		382		407		387		1,815		1,617
Interest credited to contractholder funds		449		445		450		463		490		496		561		579		1,807		2,126
Amortization of deferred policy acquisition costs		1,065		1,006		949		1,014		1,105		1,023		1,229		1,397		4,034		4,754
Operating costs and expenses		835		828		789		829		760		744		702		801		3,281		3,007
Restructuring and related charges		(3)		9		13		11		18		35		32		45		30		130
Interest expense		92		91		92		92		101		106		97		88		367		392
Total costs and expenses		7,723		7,427		7,492		7,643		7,366		7,359		8,030		8,017		30,285		30,772
(Loss) gain on disposition of operations		(1)		9		2		1		1		2		1		3		11		7
Income (loss) from operations before income tax expense (benefit)		363		490		166		107		693		225		461		(131)		1,126		1,248
Income tax expense (benefit)		67		123		21		(13)		175		4		72		143		198		394
Net income (loss)		$	296	$	367	$	145	$	120	$	518	$	221	$	389	$	(274)	$	928	$	854
Earnings per share:(2)(3)
Net income (loss) per share - Basic		$	0.55	$	0.68	$	0.27	$	0.22	$	0.96	$	0.41	$	0.72	$	(0.51)	$	1.72	$	1.58
Weighted average shares - Basic		539.5		540.9		540.7		540.5		539.9		539.9		539.8		538.9		540.3		539.6
Net income (loss) per share - Diluted		$	0.55	$	0.68	$	0.27	$	0.22	$	0.96	$	0.41	$	0.72	$	(0.51)	$	1.71	$	1.58
Weighted average shares - Diluted		542.0		543.0		543.0		541.8		542.1		541.5		540.6		538.9		542.5		540.9
Cash dividends declared per share		$	0.20	$	0.20	$	0.20	$	0.20	$	0.20	$	0.20	$	0.20	$	0.20	$	0.80	$	0.80

(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.

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

1

THE ALLSTATE CORPORATION

CONTRIBUTION TO INCOME

($ in millions, except per share data)

	Three months ended																	Twelve months ended
		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Dec. 31,
		2010		2010		2010		2010		2009		2009		2009		2009		2010		2009
Contribution to income
Operating income before the impact of restructuring and related charges		$	270	$	457	$	450	$	382	$	604	$	561	$	318	$	483	$	1,559	$	1,966
Restructuring and related charges, after-tax		1		(5)		(9)		(7)		(12)		(23)		(21)		(29)		(20)		(85)
Operating income *		271		452		441		375		592		538		297		454		1,539		1,881
Realized capital gains and losses, after-tax		76		(93)		(294)		(226)		(22)		(336)		218		(488)		(537)		(628)
DAC and DSI (amortization) accretion relating to realized capital gains and losses, after-tax		(43)		7		4		(2)		(45)		18		(131)		(19)		(34)		(177)
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)		(5)		(7)		(10)		(7)		-		4		1		(29)		(2)
(Loss) gain on disposition of operations, after-tax		(1)		6		1		1		-		1		1		2		7		4
Net income (loss)		$	296	$	367	$	145	$	120	$	518	$	221	$	389	$	(274)	$	928	$	854
Income per share - Diluted(1)(2)
Operating income before the impact of restructuring and related charges		$	0.50	$	0.84	$	0.83	$	0.70	$	1.11	$	1.04	$	0.59	$	0.90	$	2.87	$	3.63
Restructuring and related charges, after-tax		-		(0.01)		(0.02)		(0.01)		(0.02)		(0.05)		(0.04)		(0.06)		(0.03)		(0.15)
Operating income		0.50		0.83		0.81		0.69		1.09		0.99		0.55		0.84		2.84		3.48
Realized capital gains and losses, after-tax		0.14		(0.17)		(0.53)		(0.42)		(0.04)		(0.62)		0.40		(0.90)		(0.99)		(1.16)
DAC and DSI (amortization) accretion relating to realized capital gains and losses, after-tax		(0.08)		0.01		-		-		(0.08)		0.04		(0.24)		(0.03)		(0.06)		(0.33)
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)		-		(0.01)		(0.02)		(0.01)		-		0.01		-		(0.06)		-
Gain on disposition of operations, after-tax		-		0.01		-		-		-		-		-		-		0.01		0.01
Net income (loss)		$	0.55	$	0.68	$	0.27	$	0.22	$	0.96	$	0.41	$	0.72	$	(0.51)	$	1.71	$	1.58
Weighted average shares - Diluted		542.0		543.0		543.0		541.8		542.1		541.5		540.6		538.9		542.5		540.9

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

2

THE ALLSTATE CORPORATION

REVENUES

($ in millions)

	Three months ended																	Twelve months ended
		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Dec. 31,
		2010		2010		2010		2010		2009		2009		2009		2009		2010		2009
Property-Liability
Property-liability insurance premiums		$	6,442	$	6,499	$	6,513	$	6,503	$	6,517	$	6,535	$	6,560	$	6,582	$	25,957	$	26,194
Net investment income		291		284		310		304		324		326		334		344		1,189		1,328
Realized capital gains and losses		82		(107)		(106)		(190)		235		(290)		201		(314)		(321)		(168)
Total Property-Liability revenues		6,815		6,676		6,717		6,617		7,076		6,571		7,095		6,612		26,825		27,354
Allstate Financial
Life and annuity premiums and contract charges		531		548		545		544		498		482		494		484		2,168		1,958
Net investment income		692		707		723		731		737		744		764		819		2,853		3,064
Realized capital gains and losses		36		(38)		(353)		(162)		(275)		(234)		121		(43)		(517)		(431)
Total Allstate Financial revenues		1,259		1,217		915		1,113		960		992		1,379		1,260		4,504		4,591
Corporate and Other
Service fees (1)		3		2		3		3		2		3		1		3		11		9
Net investment income		15		14		16		15		15		14		10		13		60		52
Realized capital gains and losses		(2)		1		8		4		7		5		6		(2)		11		16
Total Corporate and Other revenues before reclassification of services fees		16		17		27		22		24		22		17		14		82		77
Reclassification of service fees (1)		(3)		(2)		(3)		(3)		(2)		(3)		(1)		(3)		(11)		(9)
Total Corporate and Other revenues		13		15		24		19		22		19		16		11		71		68
Consolidated revenues		$	8,087	$	7,908	$	7,656	$	7,749	$	8,058	$	7,582	$	8,490	$	7,883	$	31,400	$	32,013

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

3

THE ALLSTATE CORPORATION

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

($ in millions)

	Dec. 31,			Sept. 30,			June 30,			March 31,			Dec. 31,
	2010			2010			2010			2010			2009
Assets
Investments
Fixed income securities, at fair value (amortized cost $78,786, $80,786, $81,425, $82,486 and $81,243)	$	79,612		$	83,193		$	81,925		$	81,284		$	78,766
Equity securities, at fair value(cost $4,228, $3,447, $3,356, $3,436 and $4,845)	4,811			3,707			3,254			3,807			5,024
Mortgage loans	6,679			6,961			7,173			7,639			7,935
Limited partnership interests	3,816			3,454			3,119			2,802			2,744
Short-term, at fair value (amortized cost $3,279, $2,776, $2,414, $2,482 and $3,056)	3,279			2,776			2,414			2,482			3,056
Other	2,286			2,123			2,058			2,209			2,308
Total investments	100,483			102,214			99,943			100,223			99,833
Cash	562			500			711			704			612
Premium installment receivables, net	4,839			4,981			4,830			4,823			4,839
Deferred policy acquisition costs	4,769			4,671			5,003			5,186			5,470
Reinsurance recoverables, net (1)	6,552			6,597			6,537			6,415			6,355
Accrued investment income	809			847			851			904			864
Deferred income taxes	784			670			1,301			1,440			1,870
Property and equipment, net	921			922			935			954			990
Goodwill	874			874			874			874			875
Other assets	1,605			1,799			1,822			1,804			1,872
Separate Accounts	8,676			8,459			8,003			9,059			9,072
Total assets	$	130,874		$	132,534		$	130,810		$	132,386		$	132,652
Liabilities
Reserve for property-liability insurance claims and claims expense	$	19,468		$	19,294		$	19,434		$	19,420		$	19,167
Reserve for life-contingent contract benefits	13,482			13,955			13,483			13,052			12,910
Contractholder funds	48,195			48,936			49,443			51,027			52,582
Unearned premiums	9,800			10,001			9,684			9,575			9,822
Claim payments outstanding	737			733			733			763			742
Other liabilities and accrued expenses	5,564			5,945			6,054			5,992			5,726
Long-term debt	5,908			5,909			5,909			5,910			5,910
Separate Accounts	8,676			8,459			8,003			9,059			9,072
Total liabilities	111,830			113,232			112,743			114,798			115,931
Equity
Common stock, 533 million, 538 million, 538 million, 538 million and 537 million shares outstanding	9			9			9			9			9
Additional capital paid-in	3,176			3,165			3,155			3,152			3,172
Retained income	31,969			31,781			31,552			31,514			31,492
Deferred ESOP expense	(44		)	(45		)	(44		)	(44		)	(47		)
Treasury stock, at cost (367 million, 362 million, 362 million, 362 million and 363 million)	(15,910		)	(15,755		)	(15,760		)	(15,782		)	(15,828		)
Accumulated other comprehensive income:
Unrealized net capital gains and losses:
Unrealized net capital losses on fixed income securities with other-than-temporary impairment	(190		)	(200		)	(332		)	(384		)	(441		)
Other unrealized net capital gains and losses	1,089			1,919			588			(172		)	(1,072		)
Unrealized adjustment to DAC, DSI and insurance reserves	36			(427		)	72			472			643
Total unrealized net capital gains and losses	935			1,292			328			(84		)	(870		)
Unrealized foreign currency translation adjustments	69			54			43			60			46
Unrecognized pension and other postretirement benefit cost	(1,188		)	(1,227		)	(1,244		)	(1,265		)	(1,282		)
Total accumulated other comprehensive (loss) income	(184		)	119			(873		)	(1,289		)	(2,106		)
Total shareholders’ equity	19,016			19,274			18,039			17,560			16,692
Noncontrolling interest	28			28			28			28			29
Total equity	19,044			19,302			18,067			17,588			16,721
Total liabilities and equity	$	130,874		$	132,534		$	130,810		$	132,386		$	132,652

(1)Reinsurance recoverables of unpaid losses related to Property-Liability were $2,072 million, $2,095 million, $2,176 million, $2,162 million and $2,139 million at December 31, 2010, September 30, 2010, June 30, 2010, March 31, 2010 and December 31, 2009, respectively.

4

THE ALLSTATE CORPORATION

BOOK VALUE PER SHARE

($ in millions, except per share data )

	Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,
	2010		2010		2010		2010		2009		2009		2009		2009
Book value per share
Numerator:
Shareholders’ equity	$	19,016	$	19,274	$	18,039	$	17,560	$	16,692	$	17,505	$	15,068	$	12,242
Denominator:
Shares outstanding and dilutive potential shares outstanding	538.4		543.3		542.7		544.3		541.3		542.1		540.6		540.5
Book value per share	$	35.32	$	35.48	$	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	$	19,016	$	19,274	$	18,039	$	17,560	$	16,692	$	17,505	$	15,068	$	12,242
Unrealized net capital gains and losses on fixed income securities	573		1,138		398		(309)		(967)		(81)		(1,988)		(3,314)
Adjusted shareholders’ equity	$	18,443	$	18,136	$	17,641	$	17,869	$	17,659	$	17,586	$	17,056	$	15,556
Denominator:
Shares outstanding and dilutive potential shares outstanding	538.4		543.3		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	$	34.26	$	33.38	$	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
		Dec. 31,			Sept. 30,			June 30,			March 31,			Dec. 31,			Sept. 30,			June 30,			March 31,
		2010			2010			2010			2010			2009			2009			2009			2009
Return on Shareholders’ Equity
Numerator:
Net income (loss) (1)		$	928		$	1,150		$	1,004		$	1,248		$	854		$	(793)		$	(1,937)		$	(2,301)
Denominator:
Beginning shareholders’ equity		$	16,692		$	17,505		$	15,068		$	12,242		$	12,641		$	16,938		$	19,709		$	20,303
Ending shareholders’ equity		19,016			19,274			18,039			17,560			16,692			17,505			15,068			12,242
Average shareholders’ equity(2)		$	17,854		$	18,390		$	16,554		$	14,901		$	14,667		$	17,222		$	17,389		$	16,273
Return on shareholders’ equity		5.2		%	6.3		%	6.1		%	8.4		%	5.8		%	(4.6)		%	(11.1)		%	(14.1)		%
Operating Income Return on Shareholders’ Equity *
Numerator:
Operating income (1)		$	1,539		$	1,860		$	1,946		$	1,802		$	1,881		$	1,807		$	1,079		$	1,465
Denominator:
Beginning shareholders’ equity		$	16,692		$	17,505		$	15,068		$	12,242		$	12,641		$	16,938		$	19,709		$	20,303
Unrealized net capital gains and losses		(870)			112			(2,112)			(3,767)			(3,738)			(1,475)			(274)			(280)
Adjusted beginning shareholders’ equity		17,562			17,393			17,180			16,009			16,379			18,413			19,983			20,583
Ending shareholders’ equity		19,016			19,274			18,039			17,560			16,692			17,505			15,068			12,242
Unrealized net capital gains and losses		935			1,292			328			(84)			(870)			112			(2,112)			(3,767)
Adjusted ending shareholders’ equity		18,081			17,982			17,711			17,644			17,562			17,393			17,180			16,009
Average adjusted shareholders’ equity(2)		$	17,822		$	17,688		$	17,446		$	16,827		$	16,971		$	17,903		$	18,582		$	18,296
Operating income return on shareholders’ equity		8.6		%	10.5		%	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)

	Dec. 31,			Sept. 30,			June 30,			March 31,			Dec. 31,			Sept. 30,			June 30,			March 31,
	2010			2010			2010			2010			2009			2009			2009			2009
Debt
Long-term debt	5,908			$	5,909		$	5,909		$	5,910		$	5,910		$	6,661		$	6,658		$	5,659
Capital resources
Debt	$	5,908		$	5,909		$	5,909		$	5,910		$	5,910		$	6,661		$	6,658		$	5,659
Shareholders’ equity
Common stock	9			9			9			9			9			9			9			9
Additional capital paid-in	3,176			3,165			3,155			3,152			3,172			3,160			3,144			3,129
Retained income	31,969			31,781			31,552			31,514			31,492			31,083			30,969			29,825
Deferred ESOP expense	(44)			(45)			(44)			(44)			(47)			(47)			(47)			(46)
Treasury stock	(15,910)			(15,755)			(15,760)			(15,782)			(15,828)			(15,832)			(15,835)			(15,836)
Unrealized net capital gains and losses	935			1,292			328			(84)			(870)			112			(2,112)			(3,767)
Unrealized foreign currency translation adjustments	69			54			43			60			46			42			17			(3)
Unrecognized pension and other postretirement benefit cost	(1,188)			(1,227)			(1,244)			(1,265)			(1,282)			(1,022)			(1,077)			(1,069)
Total shareholders’ equity	19,016			19,274			18,039			17,560			16,692			17,505			15,068			12,242
Total capital resources	$	24,924		$	25,183		$	23,948		$	23,470		$	22,602		$	24,166		$	21,726		$	17,901
Ratio of debt to shareholders’ equity	31.1		%	30.7		%	32.8		%	33.7		%	35.4		%	38.1		%	44.2		%	46.2		%
Ratio of debt to capital resources	23.7		%	23.5		%	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																	Twelve months ended
		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Dec. 31,
		2010		2010		2010		2010		2009		2009		2009		2009		2010		2009
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)		$	296	$	367	$	145	$	120	$	518	$	221	$	389	$	(274)	$	928	$	854
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, amortization and other non-cash items		39		29		10		16		(4)		(1)		(12)		(74)		94		(91)
Realized capital gains and losses		(116)		144		451		348		33		519		(328)		359		827		583
Loss (gain) on disposition of operations		1		(9)		(2)		(1)		(1)		(2)		(1)		(3)		(11)		(7)
Interest credited to contractholder funds		449		445		450		463		490		496		561		579		1,807		2,126
Changes in:
Policy benefits and other insurance reserves		95		(163)		118		188		(117)		(312)		96		(244)		238		(577)
Unearned premiums		(212)		307		126		(261)		(253)		289		47		(330)		(40)		(247)
Deferred policy acquisition costs		44		(68)		(100)		30		43		(77)		167		381		(94)		514
Premium installment receivables, net		147		(146)		(15)		24		134		(163)		(16)		71		10		26
Reinsurance recoverables, net		(36)		(23)		(134)		(72)		16		32		(52)		(81)		(265)		(85)
Income taxes		22		104		1		73		485		(184)		(84)		1,443		200		1,660
Other operating assets and liabilities		(63)		(58)		80		36		(558)		215		193		(305)		(5)		(455)
Net cash provided by operating activities		666		929		1,130		964		786		1,033		960		1,522		3,689		4,301
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sales
Fixed income securities		5,536		8,231		4,184		4,930		5,261		7,242		4,373		4,483		22,881		21,359
Equity securities		87		1,216		1,056		1,990		2,258		1,089		1,675		1,872		4,349		6,894
Limited partnership interests		118		109		132		146		76		79		60		154		505		369
Mortgage loans		3		77		41		3		200		(1)		129		12		124		340
Other investments		23		36		25		37		91		167		246		16		121		520
Investment collections
Fixed income securities		1,475		1,281		1,269		1,122		1,609		1,289		1,455		1,203		5,147		5,556
Mortgage loans		292		146		375		263		671		495		126		472		1,076		1,764
Other investments		41		52		26		18		18		34		34		31		137		117
Investment purchases
Fixed income securities		(5,033)		(8,812)		(4,801)		(7,099)		(6,879)		(10,270)		(6,999)		(5,425)		(25,745)		(29,573)
Equity securities		(843)		(1,220)		(945)		(556)		(2,505)		(1,784)		(2,274)		(1,933)		(3,564)		(8,496)
Limited partnership interests		(302)		(424)		(431)		(185)		(110)		(406)		(124)		(144)		(1,342)		(784)
Mortgage loans		(65)		(45)		(9)		(1)		(3)		(9)		(4)		(10)		(120)		(26)
Other investments		(82)		(20)		(36)		(43)		(10)		(13)		(41)		-		(181)		(64)
Change in short-term investments, net		(486)		(335)		28		411		544		2,270		2,460		707		(382)		5,981
Change in other investments, net		(55)		(336)		(79)		(49)		(196)		(64)		(32)		(48)		(519)		(340)
Disposition of operations		-		7		-		-		-		-		-		12		7		12
Purchases of property and equipment, net		(48)		(45)		(45)		(24)		(46)		(39)		(51)		(53)		(162)		(189)
Net cash provided by (used in) investing activities		661		(82)		790		963		979		79		1,033		1,349		2,332		3,440
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of long-term debt		-		-		-		-		-		3		1,000		-		-		1,003
Repayment of long-term debt		(1)		-		(1)		-		(751)		-		(1)		-		(2)		(752)
Contractholder fund deposits		683		730		739		828		898		802		1,152		1,298		2,980		4,150
Contractholder fund withdrawals		(1,691)		(1,667)		(2,543)		(2,569)		(1,921)		(1,749)		(4,159)		(3,577)		(8,470)		(11,406)
Dividends paid		(108)		(107)		(108)		(107)		(108)		(107)		(107)		(220)		(430)		(542)
Treasury stock purchases		(147)		-		-		(5)		(1)		-		-		(3)		(152)		(4)
Shares reissued under equity incentive plans, net		2		1		11		14		1		2		-		-		28		3
Excess tax benefits on share-based payment arrangements		-		(3)		(2)		(2)		1		-		-		(6)		(7)		(5)
Other		(3)		(12)		(9)		6		1		(3)		(48)		59		(18)		9
Net cash used in financing activities		(1,265)		(1,058)		(1,913)		(1,835)		(1,880)		(1,052)		(2,163)		(2,449)		(6,071)		(7,544)
NET INCREASE (DECREASE) IN CASH		62		(211)		7		92		(115)		60		(170)		422		(50)		197
CASH AT BEGINNING OF PERIOD		500		711		704		612		727		667		837		415		612		415
CASH AT END OF PERIOD		$	562	$	500	$	711	$	704	$	612	$	727	$	667	$	837	$	562	$	612

8

THE ALLSTATE CORPORATION

ANALYSIS OF DEFERRED POLICY ACQUISITION COSTS

($ in millions)

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

	Change in Deferred Policy Acquisition Costs
	For the three months ended December 31, 2009
							Accretion
							(amortization)
							relating to
							realized		Amortization		Effect of
	Beginning		Acquisition		Amortization		capital		acceleration		unrealized		Ending
	balance		costs		before		gains and		charged		capital gains		balance
	Sept. 30, 2009		deferred		adjustments (1) (2)		losses (2)		to income (2)		and losses		Dec. 31, 2009
Property-Liability	$	1,446	921		$	(957)	$	-	$	-	$	-	$	1,410
Allstate Financial:
Traditional life and accident and health	628		49		(27)		-		-		-		650
Interest-sensitive life	2,214		71		(40)		4		-		(3)		2,246
Fixed annuity	2,623		22		(23)		(62)		-		(1,401)		1,159
Other	5		-		-		-		-		-		5
Sub-total	5,470		142		(90)		(58)		-		(1,404)		4,060
Consolidated	$	6,916	$	1,063	$	(1,047)	$	(58)	$	-	$	(1,404)	$	5,470

(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.

9

THE ALLSTATE CORPORATION

ANALYSIS OF DEFERRED POLICY ACQUISITION COSTS

($ in millions)

	Change in Deferred Policy Acquisition Costs														Reconciliation of Deferred Policy
	For the twelve months ended December 31, 2010														Acquisition Costs as of December 31, 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		Dec. 31, 2010		and losses		and losses		and losses
Property-Liability	$	1,410	$	3,645	$	(3,678)	$	-	$	-	$	-	$	1,377	$	1,377	$	-	$	1,377
Allstate Financial:
Traditional life and accident and health	650		156		(113)		-		-		-		693		693		-		693
Interest-sensitive life	2,246		275		(140)		15		13		(144)		2,265		2,312		(47)		2,265
Fixed annuity	1,159		52		(71)		(57)		(1)		(651)		431		309		122		431
Other	5		-		(2)		-		-		-		3		3		-		3
Sub-total	4,060		483		(326)		(42)		12		(795)		3,392		3,317		75		3,392
Consolidated	$	5,470	$	4,128	$	(4,004)	$	(42)	$	12	$	(795)	$	4,769	$	4,694	$	75	$	4,769

	Change in Deferred Policy Acquisition Costs																		Reconciliation of Deferred Policy
	For the twelve months ended December 31, 2009																		Acquisition Costs as of December 31, 2009
					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		Dec. 31, 2009		and losses		and losses		and losses
Property-Liability	$	1,453	$	-	$	-	$	3,746	$	(3,789)	$	-	$	-	$	-	$	1,410	$	1,410	$	-	$	1,410
Allstate Financial:
Traditional life and accident and health	595		-		-		162		(107)		-		-		-		650		650		-		650
Interest-sensitive life	2,449		(6)		6		230		(176)		(4)		12		(265)		2,246		2,149		97		2,246
Fixed annuity	4,037		(170)		170		103		(186)		(212)		(289)		(2,294)		1,159		386		773		1,159
Other	8		-		-		-		(3)		-		-		-		5		5		-		5
Sub-total	7,089		(176)		176		495		(472)		(216)		(277)		(2,559)		4,060		3,190		870		4,060
Consolidated	$	8,542	$	(176)	$	176	$	4,241	$	(4,261)	$	(216)	$	(277)	$	(2,559)	$	5,470	$	4,600	$	870	$	5,470

(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

HISTORICAL CONSOLIDATED OPERATING

AND FINANCIAL POSITION DATA

($ in millions except per share data)

	At or for the Year Ended December 31,
	2010		2009		2008		2007		2006
Consolidated statements of operations data:
Insurance premiums and contract charges	$	28,125	$	28,152	$	28,862	$	29,099	$	29,333
Net investment income	4,102		4,444		5,622		6,435		6,177
Realized capital gains and losses	(827)		(583)		(5,090)		1,235		286
Total revenues	$	31,400	$	32,013	$	29,394	$	36,769	$	35,796
Operating income	$	1,539	$	1,881	$	1,758	$	3,863	$	4,888
Realized capital gains and losses, after-tax	(537)		(628)		(3,311)		798		186
DAC and DSI (amortization) accretion relating to realized capital gains and losses, after-tax	(34)		(177)		385		12		36
DAC and DSI unlocking relating to realized capital gains and losses, after-tax	(18)		(224)		(274)		-		-
Non-recurring items, after-tax(1)	-		-		(219)		-		(18)
Reclassification of periodic settlements and accruals on non-hedge derivative instruments, after-tax	(29)		(2)		(14)		(29)		(36)
Gain (loss) on disposition of operations, after-tax	7		4		(4)		(8)		(63)
Net income (loss)	$	928	$	854	$	(1,679)	$	4,636	$	4,993
Income per share - Diluted
Operating income	$	2.84	$	3.48	$	3.21	$	6.47	$	7.66
Realized capital gains and losses, after-tax	(0.99)		(1.16)		(6.04)		1.33		0.29
DAC and DSI (amortization) accretion relating to realized capital gains and losses, after-tax	(0.06)		(0.33)		0.70		0.02		0.06
DAC and DSI unlocking relating to realized capital gains and losses, after-tax	(0.03)		(0.42)		(0.50)		-		-
Non-recurring items, after-tax (1)	-		-		(0.40)		-		(0.03)
Reclassification of periodic settlements and accruals on non-hedge derivative instruments, after-tax	(0.06)		-		(0.02)		(0.05)		(0.05)
Gain (loss) on disposition of operations, after-tax	0.01		0.01		(0.01)		(0.01)		(0.10)
Net income (loss)	$	1.71	$	1.58	$	(3.06)	$	7.76	$	7.83
Net income (loss) per share - Basic	$	1.72	$	1.58	$	(3.06)	$	7.80	$	7.88
Consolidated statements of financial position data:
Investments	$	100,483	$	99,833	$	95,998	$	118,980	$	119,757
Total assets	130,874		132,652		134,798		156,408		157,554
Reserves for claims and claims expense, life-contingent contract benefits and contractholder funds	81,145		84,659		90,750		94,052		93,683
Debt	5,908		5,910		5,659		5,640		4,662
Shareholders’ equity	19,016		16,692		12,641		21,851		21,846
Book value per share	35.32		30.84		23.47		38.54		34.80
Operating ratios:
Annual statutory premiums written to surplus ratio (U.S. property-liability operations)	1.6x		1.7x		1.9x		1.5x		1.4x
Other operating data:
Total employees (excluding agents) (2)	35,200		36,000		38,500		38,400		37,200
Total Allstate agencies (2)	13,400		14,200		14,700		15,000		14,800

(1)

During the fourth quarter of 2008, for traditional life insurance and immediate annuities with life contingencies, an aggregate premium deficiency of $336 million, pre-tax ($219 million, after-tax) resulted primarily from an experience study indicating that the annuitants on certain life-contingent contracts are projected to live longer than we anticipated when the contracts were issued, and, to a lesser degree, a reduction in the related investment portfolio yield.  The deficiency was recorded through a reduction in deferred acquisition costs.

(2)

Rounded to the nearest hundred.

11

THE ALLSTATE CORPORATION

PROPERTY-LIABILITY RESULTS

($ in millions, except ratios)

	Three months ended																	Twelve months ended
		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Dec. 31,
		2010		2010		2010		2010		2009		2009		2009		2009		2010		2009
Premiums written *		$	6,242	$	6,767	$	6,640	$	6,258	$	6,277	$	6,810	$	6,615	$	6,269	$	25,907	$	25,971
Decrease (increase) in unearned premiums		203		(319)		(110)		245		248		(315)		(70)		337		19		200
Other		(3)		51		(17)		-		(8)		40		15		(24)		31		23
Premiums earned		6,442		6,499		6,513		6,503		6,517		6,535		6,560		6,582		25,957		26,194
Claims and claims expense		(4,842)		(4,603)		(4,714)		(4,792)		(4,451)		(4,573)		(5,002)		(4,720)		(18,951)		(18,746)
Amortization of deferred policy acquisition costs		(924)		(915)		(914)		(925)		(957)		(943)		(940)		(949)		(3,678)		(3,789)
Operating costs and expenses		(726)		(706)		(664)		(704)		(648)		(642)		(591)		(678)		(2,800)		(2,559)
Restructuring and related charges		1		(9)		(14)		(11)		(17)		(31)		(30)		(27)		(33)		(105)
Underwriting (loss) income *		(49)		266		207		71		444		346		(3)		208		495		995
Net investment income		291		284		310		304		324		326		334		344		1,189		1,328
Periodic settlements and accruals on non-hedge derivative instruments		(3)		(2)		(1)		(1)		(2)		(2)		(3)		(3)		(7)		(10)
Income tax expense on operations		(33)		(154)		(148)		(88)		(212)		(169)		(39)		(135)		(423)		(555)
Operating income		206		394		368		286		554		501		289		414		1,254		1,758
Realized capital gains and losses, after-tax		54		(69)		(69)		(123)		151		(188)		131		(316)		(207)		(222)
(Loss) gain on disposition of operations, after-tax		(1)		4		-		-		-		-		-		-		3		-
Reclassification of periodic settlements and accruals on non-hedge derivative instruments, after-tax		1		2		-		1		2		1		2		2		4		7
Net income		$	260	$	331	$	299	$	164	$	707	$	314	$	422	$	100	$	1,054	$	1,543
Catastrophe losses		$	537	$	386	$	636	$	648	$	328	$	407	$	818	$	516	$	2,207	$	2,069
Operating ratios *
Claims and claims expense (“loss”) ratio		75.2		70.8		72.4		73.7		68.3		70.0		76.2		71.7		73.0		71.6
Expense ratio(1)		25.6		25.1		24.4		25.2		24.9		24.7		23.8		25.1		25.1		24.6
Combined ratio		100.8		95.9		96.8		98.9		93.2		94.7		100.0		96.8		98.1		96.2
Combined ratio excluding the effect of catastrophes *		92.5		90.0		87.0		88.9		88.2		88.5		87.5		89.0		89.6		88.3
Effect of catastrophe losses on combined ratio *		8.3		5.9		9.8		10.0		5.0		6.2		12.5		7.8		8.5		7.9
Combined ratio		100.8		95.9		96.8		98.9		93.2		94.7		100.0		96.8		98.1		96.2
Combined ratio excluding the effect of catastrophes and prior year reserve reestimates (“underlying”) *		92.0		89.2		88.1		89.1		88.1		88.0		87.2		88.9		89.6		88.1
Effect of catastrophe losses on combined ratio *		8.3		5.9		9.8		10.0		5.0		6.2		12.5		7.8		8.5		7.9
Effect of prior year reserve reestimates on combined ratio *		0.1		0.2		(2.3)		(0.4)		(0.4)		(0.7)		0.3		(0.8)		(0.6)		(0.4)
Effect of catastrophe losses included in prior year reserve reestimates on combined ratio		0.4		0.6		1.2		0.2		0.5		1.2		-		0.9		0.6		0.6
Combined ratio		100.8		95.9		96.8		98.9		93.2		94.7		100.0		96.8		98.1		96.2
Effect of restructuring and related charges on combined ratio *		-		0.1		0.2		0.2		0.3		0.5		0.5		0.4		0.1		0.4
Effect of Discontinued Lines and Coverages on combined ratio		0.1		0.3		-		0.1		0.1		0.3		-		0.1		0.1		0.1

(1)The increase in the expense ratio in the three and twelve months ended December 31, 2010 compared to the same periods of 2009 was primarily due to higher marketing expenditures, partially offset by reduced guaranty fund accrual levels. Excluding restructuring, the expense ratio in the twelve months ended December 31, 2010 was also impacted by increases in net costs of employee benefits, partially offset by improved operational efficiencies.

12

THE ALLSTATE CORPORATION

HISTORICAL PROPERTY-LIABILITY RESULTS

($ in millions)

	Twelve months ended December 31,
	2010		2009		2008		2007		2006
Premiums written	$	25,907	$	25,971	$	26,584	$	27,183	$	27,526
Decrease (increase) in unearned premium	19		200		383		17		(354)
Other	31		23		-		33		197
Premiums earned	25,957		26,194		26,967		27,233		27,369
Claims and claims expense	(18,951)		(18,746)		(20,064)		(17,667)		(16,017)
Amortization of deferred policy acquisition costs	(3,678)		(3,789)		(3,975)		(4,121)		(4,131)
Operating costs and expenses	(2,800)		(2,559)		(2,742)		(2,634)		(2,567)
Restructuring and related charges	(33)		(105)		(22)		(27)		(157)
Underwriting income	495		995		164		2,784		4,497
Net investment income	1,189		1,328		1,674		1,972		1,854
Periodic settlement and accruals on non-hedge derivative instruments	(7)		(10)		1		-		-
Income tax expense on operations	(423)		(555)		(401)		(1,413)		(1,963)
Operating income	1,254		1,758		1,438		3,343		4,388
Realized capital gains and losses, after-tax	(207)		(222)		(1,209)		915		227
Gain (loss) on disposition of operations, after-tax	3		-		-		-		(1)
Reclassification of periodic settlements and accruals on non-hedge derivative instruments, after-tax	4		7		(1)		-		-
Net income	$	1,054	$	1,543	$	228	$	4,258	$	4,614
Catastrophe losses	$	2,207	$	2,069	$	3,342	$	1,409	$	810
Operating ratios
Loss ratio	73.0		71.6		74.4		64.9		58.5
Expense ratio	25.1		24.6		25.0		24.9		25.1
Combined ratio	98.1		96.2		99.4		89.8		83.6
Combined ratio excluding the effect of catastrophes	89.6		88.3		87.0		84.6		80.6
Effect of catastrophe losses on combined ratio	8.5		7.9		12.4		5.2		3.0
Combined ratio	98.1		96.2		99.4		89.8		83.6
Combined ratio excluding the effect of catastrophes and prior year reserve reestimates (“underlying”)	89.6		88.1		86.8		85.7		83.3
Effect of catastrophe losses on combined ratio	8.5		7.9		12.4		5.2		3.0
Effect of prior year reserve reestimates on combined ratio	(0.6)		(0.4)		0.7		(0.6)		(3.5)
Effect of catastrophe losses included in prior year reserve reestimate on combined ratio	0.6		0.6		(0.5)		(0.5)		0.8
Combined ratio	98.1		96.2		99.4		89.8		83.6
Effect of restructuring and related charges on combined ratio	0.1		0.4		0.1		0.1		0.6
Effect of Discontinued Lines and Coverages on the combined ratio	0.1		0.1		0.1		0.2		0.5

13

THE ALLSTATE CORPORATION

PROPERTY-LIABILITY UNDERWRITING RESULTS BY AREA OF BUSINESS

($ in millions)

	Three months ended																	Twelve months ended
		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Dec. 31,
		2010		2010		2010		2010		2009		2009		2009		2009		2010		2009
Property-Liability Underwriting Summary
Allstate Protection		$	(45)	$	287	$	209	$	75	$	449	$	363	$	1	$	214	$	526	$	1,027
Discontinued Lines and Coverages		(4)		(21)		(2)		(4)		(5)		(17)		(4)		(6)		(31)		(32)
Underwriting (loss) income		$	(49)	$	266	$	207	$	71	$	444	$	346	$	(3)	$	208	$	495	$	995
Allstate Protection Underwriting Summary
Premiums written		$	6,241	$	6,767	$	6,640	$	6,258	$	6,277	$	6,810	$	6,615	$	6,270	$	25,906	$	25,972
Premiums earned		$	6,441	$	6,498	$	6,513	$	6,503	$	6,517	$	6,535	$	6,560	$	6,583	$	25,955	$	26,195
Claims and claims expense		(4,838)		(4,582)		(4,713)		(4,790)		(4,448)		(4,557)		(5,000)		(4,717)		(18,923)		(18,722)
Amortization of deferred policy acquisition costs		(924)		(915)		(914)		(925)		(957)		(943)		(940)		(949)		(3,678)		(3,789)
Operating costs and expenses		(725)		(705)		(663)		(702)		(646)		(641)		(589)		(676)		(2,795)		(2,552)
Restructuring and related charges		1		(9)		(14)		(11)		(17)		(31)		(30)		(27)		(33)		(105)
Underwriting (loss) income		$	(45)	$	287	$	209	$	75	$	449	$	363	$	1	$	214	$	526	$	1,027
Catastrophe losses		$	537	$	386	$	636	$	648	$	328	$	407	$	818	$	516	$	2,207	$	2,069
Operating ratios
Loss ratio		75.1		70.5		72.4		73.6		68.2		69.7		76.2		71.6		72.9		71.5
Expense ratio		25.6		25.1		24.4		25.2		24.9		24.7		23.8		25.1		25.1		24.6
Combined ratio		100.7		95.6		96.8		98.8		93.1		94.4		100.0		96.7		98.0		96.1
Effect of catastrophe losses on combined ratio		8.3		5.9		9.8		10.0		5.0		6.2		12.5		7.8		8.5		7.9
Effect of restructuring and related charges on combined ratio		-		0.1		0.2		0.2		0.3		0.5		0.5		0.4		0.1		0.4
Discontinued Lines and Coverages Underwriting Summary
Premiums written		$	1	$	-	$	-	$	-	$	-	$	-	$	-	$	(1)	$	1	$	(1)
Premiums earned		$	1	$	1	$	-	$	-	$	-	$	-	$	-	$	(1)	$	2	$	(1)
Claims and claims expense		(4)		(21)		(1)		(2)		(3)		(16)		(2)		(3)		(28)		(24)
Operating costs and expenses		(1)		(1)		(1)		(2)		(2)		(1)		(2)		(2)		(5)		(7)
Underwriting loss		$	(4)	$	(21)	$	(2)	$	(4)	$	(5)	$	(17)	$	(4)	$	(6)	$	(31)	$	(32)
Effect of Discontinued Lines and Coverages on the Property-Liability combined ratio		0.1		0.3		-		0.1		0.1		0.3		-		0.1		0.1		0.1

14

THE ALLSTATE CORPORATION

HISTORICAL PROPERTY-LIABILITY

UNDERWRITING RESULTS BY AREA OF BUSINESS

($ in millions)

	Twelve months ended December 31,
	2010		2009		2008		2007		2006
Property-Liability Underwriting Summary
Allstate Protection	$	526	$	1,027	$	189	$	2,838	$	4,636
Discontinued Lines and Coverages	(31)		(32)		(25)		(54)		(139)
Underwriting income	$	495	$	995	$	164	$	2,784	$	4,497
Allstate Protection Underwriting Summary
Premiums written	$	25,906	$	25,972	$	26,584	$	27,183	$	27,525
Premiums earned	$	25,955	$	26,195	$	26,967	$	27,232	$	27,366
Claims and claims expense	(18,923)		(18,722)		(20,046)		(17,620)		(15,885)
Amortization of deferred policy acquisition costs	(3,678)		(3,789)		(3,975)		(4,121)		(4,131)
Operating costs and expenses	(2,795)		(2,552)		(2,735)		(2,626)		(2,557)
Restructuring and related charges	(33)		(105)		(22)		(27)		(157)
Underwriting income	$	526	$	1,027	$	189	$	2,838	$	4,636
Catastrophe losses	$	2,207	$	2,069	$	3,342	$	1,409	$	810
Operating ratios
Loss ratio	72.9		71.5		74.3		64.7		58.1
Expense ratio	25.1		24.6		25.0		24.9		25.0
Combined ratio	98.0		96.1		99.3		89.6		83.1
Effect of catastrophe losses on combined ratio	8.5		7.9		12.4		5.2		3.0
Effect of restructuring and related charges on combined ratio	0.1		0.4		0.1		0.1		0.6
Discontinued Lines and Coverages Underwriting Summary
Premiums written	$	1	$	(1)	$	-	$	-	$	1
Premiums earned	$	2	$	(1)	$	-	$	1	$	3
Claims and claims expense	(28)		(24)		(18)		(47)		(132)
Operating costs and expenses	(5)		(7)		(7)		(8)		(10)
Underwriting loss	$	(31)	$	(32)	$	(25)	$	(54)	$	(139)
Effect of Discontinued Lines and Coverages on the Property-Liability combined ratio	0.1		0.1		0.1		0.2		0.5

15

THE ALLSTATE CORPORATION

PROPERTY-LIABILITY PREMIUMS WRITTEN BY MARKET SEGMENT

($ in millions)

	Three months ended																	Twelve months ended
		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Dec. 31,
		2010		2010		2010		2010		2009		2009		2009		2009		2010		2009
Allstate brand (1)
Standard auto		$	3,843	$	4,028	$	3,948	$	4,023	$	3,860	$	4,049	$	3,876	$	3,978	$	15,842	$	15,763
Non-standard auto		203		223		220		237		219		235		232		241		883		927
Auto		4,046		4,251		4,168		4,260		4,079		4,284		4,108		4,219		16,725		16,690
Involuntary auto		22		18		25		16		15		13		15		12		81		55
Commercial lines		120		130		137		131		128		132		147		143		518		550
Homeowners		1,389		1,610		1,565		1,189		1,359		1,573		1,532		1,171		5,753		5,635
Other personal lines		408		468		457		399		410		460		451		391		1,732		1,712
		5,985		6,477		6,352		5,995		5,991		6,462		6,253		5,936		24,809		24,642
Encompass brand
Standard auto		149		166		169		160		171		208		217		204		644		800
Non-standard auto		1		1		1		3		3		6		5		8		6		22
Auto		150		167		170		163		174		214		222		212		650		822
Involuntary auto		2		3		3		2		2		2		3		3		10		10
Homeowners		85		98		94		80		89		110		112		97		357		408
Other personal lines		19		22		21		18		21		22		25		22		80		90
		256		290		288		263		286		348		362		334		1,097		1,330
Allstate Protection		6,241		6,767		6,640		6,258		6,277		6,810		6,615		6,270		25,906		25,972
Discontinued Lines and Coverages		1		-		-		-		-		-		-		(1)		1		(1)
Property-Liability		$	6,242	$	6,767	$	6,640	$	6,258	$	6,277	$	6,810	$	6,615	$	6,269	$	25,907	$	25,971
Allstate Protection
Standard auto		$	3,992	$	4,194	$	4,117	$	4,183	$	4,031	$	4,257	$	4,093	$	4,182	$	16,486	$	16,563
Non-standard auto		204		224		221		240		222		241		237		249		889		949
Auto		4,196		4,418		4,338		4,423		4,253		4,498		4,330		4,431		17,375		17,512
Involuntary auto		24		21		28		18		17		15		18		15		91		65
Commercial lines		120		130		137		131		128		132		147		143		518		550
Homeowners		1,474		1,708		1,659		1,269		1,448		1,683		1,644		1,268		6,110		6,043
Other personal lines		427		490		478		417		431		482		476		413		1,812		1,802
		$	6,241	$	6,767	$	6,640	$	6,258	$	6,277	$	6,810	$	6,615	$	6,270	$	25,906	$	25,972

(1) Allstate brand premiums written, excluding Allstate Canada, by the direct channel totaled $184 million, $195 million, $181 million, $185 million, $161 million, $169 million, $146 million and $146 million for the three months ended December 31, 2010, September 30, 2010, June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009, June 30, 2009 and March 31, 2009, respectively.  Allstate brand premiums written by the direct channel totaled $745 million and $622 million for the twelve months ended December 31, 2010 and December 31, 2009, respectively.  The decline in growth rate in the three months and twelve months ended December 31, 2010, compared to the growth rate in the three months and nine months ended September 30, 2010 was impacted by profitabiliity management actions taken in New York, Florida, California and No rth Carolina.  The direct channel includes call centers and the internet.

16

THE ALLSTATE CORPORATION

ALLSTATE PROTECTION MARKET SEGMENT ANALYSIS

($ in millions)

	Three months ended December 31,
	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	$	3,941	$	3,944	$	2,941	$	2,729	$	32	$	(12)	$	990	$	965		74.6		69.2	0.8	(0.3)	25.1	24.5	(1.2)	(0.7)
Non-standard auto	216		231		150		160		1		1		38		58		69.4		69.3		0.5	0.4	17.6	25.1	(1.4)	0.4
Auto	4,157		4,175		3,091		2,889		33		(11)		1,028		1,023		74.4		69.2		0.8	(0.3)	24.7	24.5	(1.2)	(0.6)
Homeowners	1,431		1,411		1,113		919		434		290		346		337		77.8		65.1		30.3	20.6	24.2	23.9	(1.8)	(3.3)
Other personal lines (1)	573		591		431		394		52		39		194		169		75.2		66.7		9.1	6.6	33.9	28.6	14.0	9.0
Total Allstate brand	6,161		6,177		4,635		4,202		519		318		1,568		1,529		75.2		68.0		8.4	5.1	25.5	24.8	0.1	(0.3)
Encompass brand
Standard auto	164		205		125		159		2		(1)		45		52		76.2		77.5		1.2	(0.5)	27.5	25.4	(6.1)	(0.5)
Non-standard auto	1		5		1		4		-		-		2		2		100.0		80.0		-	-	200.0	40.0	-	(20.0)
Auto	165		210		126		163		2		(1)		47		54		76.3		77.6		1.2	(0.5)	28.5	25.7	(6.1)	(1.0)
Homeowners	93		104		60		60		15		10		28		31		64.5		57.7		16.1	9.6	30.1	29.8	5.4	(3.8)
Other personal lines (1)	22		26		17		23		1		1		5		6		77.3		88.4		4.5	3.8	22.7	23.1	-	(7.7)
Total Encompass brand	280		340		203		246		18		10		80		91		72.5		72.3		6.4	2.9	28.6	26.8	(1.8)	(2.4)
Allstate Protection	$	6,441	$	6,517	$	4,838	$	4,448	$	537	$	328	$	1,648	$	1,620	75.1		68.2		8.3	5.0	25.6	24.9	-	(0.4)
	Twelve months ended December 31,
	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	$	15,814	$	15,735	$	11,186	$	10,912	$	153	$	187	$	3,914	$	3,823	70.7		69.3		1.0	1.2	24.8	24.3	(0.9)	(0.3)
Non-standard auto	896		939		602		630		3		7		215		230		67.2		67.1		0.3	0.7	24.0	24.5	(3.6)	(1.6)
Auto	16,710		16,674		11,788		11,542		156		194		4,129		4,053		70.6		69.2		0.9	1.2	24.7	24.3	(1.1)	(0.4)
Homeowners	5,693		5,633		4,672		4,484		1,782		1,636		1,338		1,296		82.1		79.6		31.3	29.0	23.5	23.0	(0.3)	(2.6)
Other personal lines (1)	2,348		2,402		1,559		1,617		170		169		696		695		66.4		67.3		7.2	7.0	29.6	29.0	0.7	3.5
Total Allstate brand	24,751		24,709		18,019		17,643		2,108		1,999		6,163		6,044		72.8		71.4		8.5	8.1	24.9	24.5	(0.7)	(0.5)
Encompass brand
Standard auto	716		907		540		684		6		3		198		236		75.4		75.4		0.8	0.3	27.7	26.0	-	0.7
Non-standard auto	9		27		9		20		-		-		5		10		100.0		74.1		-	-	55.6	37.0	-	(11.1)
Auto	725		934		549		704		6		3		203		246		75.7		75.4		0.8	0.3	28.0	26.3	-	0.3
Homeowners	385		444		286		293		89		65		117		129		74.3		66.0		23.1	14.6	30.4	29.0	(1.3)	(4.3)
Other personal lines (1)	94		108		69		82		4		2		23		27		73.4		75.9		4.3	1.9	24.5	25.0	(1.1)	5.6
Total Encompass brand	1,204		1,486		904		1,079		99		70		343		402		75.1		72.6		8.2	4.7	28.5	27.1	(0.5)	(0.7)
Allstate Protection	$	25,955	$	26,195	$	18,923	$	18,722	$	2,207	$	2,069	$	6,506	$	6,446	72.9		71.5		8.5	7.9	25.1	24.6	(0.7)	(0.5)

(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.

17

THE ALLSTATE CORPORATION

ALLSTATE PROTECTION HISTORICAL MARKET SEGMENT ANALYSIS

($ in millions)

	Three months ended						Three months ended					Three months ended					Three months ended
	December 31, 2010						September 30, 2010					June 30, 2010					March 31, 2010
				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	$	3,941	74.6	0.8		25.1	$	3,961	68.7	0.4	24.5	$	3,969	70.1	2.0	24.4	$	3,943	69.4	0.7	25.0
Non-standard auto	216		69.4	0.5		17.6	222		61.7	-	27.5	228		68.9	0.4	26.3	230		68.7	0.4	24.3
Auto	4,157		74.4	0.8		24.7	4,183		68.4	0.4	24.6	4,197		70.1	1.9	24.5	4,173		69.4	0.7	25.0
Homeowners	1,431		77.8	30.3		24.2	1,430		80.5	23.1	24.2	1,416		82.6	34.7	21.8	1,416		87.5	37.1	23.8
Other personal lines (1)	573		75.2	9.1		33.9	591		61.4	4.4	27.3	592		65.7	8.3	28.4	592		63.5	7.3	29.2
Total Allstate brand	6,161		75.2	8.4		25.5	6,204		70.5	6.0	24.8	6,205		72.5	10.0	24.3	6,181		73.0	9.7	25.1
Encompass brand
Standard auto	164		76.2	1.2		27.5	173		75.7	0.6	30.1	185		73.0	0.5	27.0	194		76.8	1.0	26.3
Non-standard auto	1		100.0	-		200.0	2		100.0	-	50.0	2		100.0	-	50.0	4		100.0	-	25.0
Auto	165		76.3	1.2		28.5	175		76.0	0.6	30.3	187		73.2	0.5	27.3	198		77.3	1.0	26.2
Homeowners	93		64.5	16.1		30.1	96		63.5	13.5	32.3	96		64.6	15.6	30.2	100		103.0	46.0	29.0
Other personal lines (1)	22		77.3	4.5		22.7	23		60.9	-	30.4	25		64.0	-	20.0	24		91.7	12.5	25.0
Total Encompass brand	280		72.5	6.4		28.6	294		70.7	4.8	31.0	308		69.8	5.2	27.6	322		86.4	15.8	27.0
Allstate Protection	$	6,441	75.1	8.3		25.6	$	6,498	70.5	5.9	25.1	$	6,513	72.4	9.8	24.4	$	6,503	73.6	10.0	25.2
	Three months ended						Three months ended					Three months ended					Three months ended
	December 31, 2009						September 30, 2009					June 30, 2009					March 31, 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	$	3,944	69.2	(0.3	)	24.5	$	3,946	68.6	1.3	24.1	$	3,928	70.7	2.1	24.2	$	3,917	68.8	1.6	24.5
Non-standard auto	231		69.3	0.4		25.1	231		63.6	0.4	25.6	240		67.1	1.3	23.7	237		68.4	0.8	23.6
Auto	4,175		69.2	(0.3	)	24.5	4,177		68.4	1.3	24.1	4,168		70.6	2.1	24.1	4,154		68.8	1.6	24.5
Homeowners	1,411		65.1	20.6		23.9	1,396		75.4	22.3	22.9	1,409		95.1	45.8	21.2	1,417		82.7	27.5	24.1
Other personal lines (1)	591		66.7	6.6		28.6	601		64.1	4.0	31.6	600		72.5	9.8	25.3	610		66.1	7.7	30.1
Total Allstate brand	6,177		68.0	5.1		24.8	6,174		69.5	6.3	24.6	6,177		76.3	12.8	23.6	6,181		71.7	8.1	25.0
Encompass brand
Standard auto	205		77.5	(0.5	)	25.4	221		76.9	0.5	25.4	234		73.5	0.4	26.1	247		74.1	0.8	27.1
Non-standard auto	5		80.0	-		40.0	6		66.7	-	50.0	7		85.7	-	28.6	9		66.7	-	33.3
Auto	210		77.6	(0.5	)	25.7	227		76.6	0.4	26.0	241		73.9	0.4	26.1	256		73.8	0.8	27.4
Homeowners	104		57.7	9.6		29.8	108		67.6	15.7	29.6	114		76.3	22.8	28.1	118		61.9	10.2	28.8
Other personal lines (1)	26		88.4	3.8		23.1	26		65.4	-	26.9	28		71.4	3.6	25.0	28		78.6	-	25.0
Total Encompass brand	340		72.3	2.9		26.8	361		73.1	5.0	27.2	383		74.4	7.3	26.6	402		70.7	3.5	27.6
Allstate Protection	$	6,517	68.2	5.0		24.9	$	6,535	69.7	6.2	24.7	$	6,560	76.2	12.5	23.8	$	6,583	71.6	7.8	25.1

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

18

THE ALLSTATE CORPORATION

PROPERTY-LIABILITY

HISTORICAL IMPACT OF NET RATE CHANGES APPROVED ON PREMIUMS WRITTEN

	Three months ended				Three months ended				Three months ended				Three months ended
	December 31, 2010 (1)				September 30, 2010				June 30, 2010				March 31, 2010
	Number of			State	Number of			State	Number of			State	Number of			State
	states		Countrywide (%) (4)	specific (%) (5)	states		Countrywide (%) (4)	specific (%) (5)	states		Countrywide (%) (4)	specific (%) (5)	states		Countrywide (%) (4)	specific (%) (5)
Allstate brand
Standard auto (2)	14	(6)	0.4	1.3	21	(7)	0.5	2.8	32	(6) (7)	0.2	0.5	8		0.3	2.9
Non-standard auto	2		0.4	3.2	4		0.7	5.8	5	(6)	2.7	10.9	1		0.9	22.1
Auto	14	(6)	0.4	1.4	24		0.5	2.9	33	(6)	0.3	0.9	9		0.3	3.3
Homeowners (3)	10		3.2	7.4	15		1.0	4.2	14	(6)	2.0	11.3	6		0.9	7.4
Encompass brand
Standard auto	6		0.1	1.1	12		(0.1)	(1.3)	10		(0.1)	(0.5)	6		1.5	7.1
Non-standard auto	-		-	-	-		-	-	-		-	-	-		-	-
Auto	6		0.1	1.1	12		(0.1)	(1.3)	10		(0.1)	(0.5)	6		1.4	7.1
Homeowners	5		0.1	0.8	8	(6)	-	(0.1)	7		-	(0.3)	5		0.7	5.2
	Three months ended				Three months ended				Three months ended				Three months ended
	December 31, 2009				September 30, 2009				June 30, 2009				March 31, 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)	15		1.5	5.5	15		1.4	6.5	12		0.8	4.3	18	(6)	0.9	3.3
Non-standard auto	4		1.1	9.4	4		1.2	5.5	2		0.1	3.2	4		0.1	1.6
Auto	17		1.5	5.6	17		1.4	6.4	13		0.8	4.3	19	(6)	0.9	3.3
Homeowners (3)	22		1.9	6.5	19	(6)	2.4	6.9	16		1.7	13.3	14		2.5	7.4
Encompass brand
Standard auto	11		1.3	9.5	13		1.6	9.6	8		1.0	8.3	24		3.7	8.1
Non-standard auto	-		-	-	-		-	-	-		-	-	1		0.9	31.7
Auto	11		1.3	9.5	13		1.6	9.6	8		0.9	8.3	25		3.6	8.1
Homeowners	10		0.6	7.9	17		2.0	4.8	10	(6)	0.5	5.7	18		1.6	6.7

(1)Rate changes include changes approved based on our net cost of reinsurance. These rate changes do not reflect initial rates filed for insurance subsidiaries initially writing business. Based on historical premiums written in those states, rate changes approved for the three month period ending December 31, 2010 are estimated to total $251 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 0.6%, 0.2%, (0.1)%, 1.5%, 1.6%, 0.5%, 0.6% and 0.7% for the three months ended December 31, 2010, September 30, 2010, June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009, June 30, 2009 and March 31, 2009, respectively.

(3)Impacts of Allstate brand homeowners effective rate changes as a percentage of total countrywide prior year-end premiums written were 2.5% 1.0%, 1.7%, 1.5%, 1.5%, 2.4%, 1.7% and 1.7% for the three months ended December 31, 2010, September 30, 2010, June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009, June 30, 2009 and March 31, 2009, respectively.

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

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

(6)Includes Washington, D.C.

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

19

THE ALLSTATE CORPORATION

STANDARD AUTO PROFITABILITY MEASURES

	Three months ended																	Twelve months ended
		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,	Dec. 31,
		2010		2010		2010		2010		2009		2009		2009		2009		2010	2009
Standard auto
($ in millions)
Net premiums written
Allstate brand		$	3,843	$	4,028	$	3,948	$	4,023	$	3,860	$	4,049	$	3,876	$	3,978	15,842	$	15,763
Encompass brand		149		166		169		160		171		208		217		204		644	800
		3,992		4,194		4,117		4,183		4,031		4,257		4,093		4,182		16,486	16,563
Net premiums earned
Allstate brand		$	3,941	$	3,961	$	3,969	$	3,943	$	3,944	$	3,946	$	3,928	$	3,917	15,814	$	15,735
Encompass brand		164		173		185		194		205		221		234		247		716	907
		4,105		4,134		4,154		4,137		4,149		4,167		4,162		4,164		16,530	16,642
Incurred losses
Allstate brand		$	2,941	$	2,723	$	2,783	$	2,739	$	2,729	$	2,708	$	2,779	$	2,696	11,186	$	10,912
Encompass brand		125		131		135		149		159		170		172		183		540	684
		3,066		2,854		2,918		2,888		2,888		2,878		2,951		2,879		11,726	11,596
Expenses
Allstate brand		$	990	$	970	$	969	$	985	$	965	$	949	$	949	$	960	3,914	$	3,823
Encompass brand		45		52		50		51		52		56		61		67		198	236
		1,035		1,022		1,019		1,036		1,017		1,005		1,010		1,027		4,112	4,059
Underwriting Income
Allstate brand		$	10	$	268	$	217	$	219	$	250	$	289	$	200	$	261	714	$	1,000
Encompass brand		(6)		(10)		-		(6)		(6)		(5)		1		(3)		(22)	(13)
		4		258		217		213		244		284		201		258		692	987
Loss ratio
Allstate brand		74.6		68.7		70.1		69.4		69.2		68.6		70.7		68.8		70.7	69.3
Encompass brand		76.2		75.7		73.0		76.8		77.5		76.9		73.5		74.1		75.4	75.4
Allstate Protection		74.7		69.1		70.3		69.8		69.6		69.1		70.9		69.1		70.9	69.7
Expense ratio
Allstate brand		25.1		24.5		24.4		25.0		24.5		24.1		24.2		24.5		24.8	24.3
Encompass brand		27.5		30.1		27.0		26.3		25.4		25.4		26.1		27.1		27.7	26.0
Allstate Protection		25.2		24.7		24.5		25.1		24.5		24.1		24.3		24.7		24.9	24.4
Combined ratio
Allstate brand		99.7		93.2		94.5		94.4		93.7		92.7		94.9		93.3		95.5	93.6
Encompass brand		103.7		105.8		100.0		103.1		102.9		102.3		99.6		101.2		103.1	101.4
Allstate Protection		99.9		93.8		94.8		94.9		94.1		93.2		95.2		93.8		95.8	94.1
Effect of catastrophe losses on loss ratio
Allstate brand		0.8		0.4		2.0		0.7		(0.3)		1.3		2.1		1.6		1.0	1.2
Encompass brand		1.2		0.6		0.5		1.0		(0.5)		0.5		0.4		0.8		0.8	0.3
Allstate brand standard auto domestic operating measures (1)
		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,	Dec. 31,
		2010		2010		2010		2010		2009		2009		2009		2009		2010	2009
Operating measures (2)
Policies in force (in thousands)		17,484		17,479		17,529		17,581		17,744		17,774		17,836		17,843		17,484	17,744
New issued applications (in thousands) (3)		526		537		498		464		488		524		496		521		2,025	2,029
New items added to existing policies (in thousands) (4)		340		394		397		367		336		398		406		369		1,498	1,509
Average premium - gross written ($)		442		441		444		443		441		435		430		430		443	434
Average premium - net earned ($)		433		432		433		430		428		426		425		424		432	426
Renewal ratio (%)		88.4		88.7		89.0		88.8		88.8		89.1		89.0		88.6		88.7	88.9
Loss trends
(% change year-over-year)
Bodily injury claim frequency		7.7		7.5		4.2		5.4		14.4		19.6		13.6		5.5		6.2	13.1
Property damage claim frequency		2.4		3.7		1.9		(0.1)		7.6		10.7		5.1		1.6		2.0	6.2

(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.

(3)Excluding Florida and California, new issued applications on a countrywide basis increased 18.6% to 421 thousand in the fourth quarter of 2010 from 355 thousand in the fourth quarter of 2009, and increased 12.9% to 1,606 thousand in the twelve months of 2010 from 1,423 thousand in the twelve months of 2009.

(4)Net increases in insured cars by policy endorsement activity.

20

THE ALLSTATE CORPORATION

NON-STANDARD AUTO PROFITABILITY MEASURES

	Three months ended																Twelve months ended
	Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Dec. 31,
	2010		2010		2010		2010		2009		2009		2009		2009		2010		2009
Non-standard auto
($ in millions)
Net premiums written
Allstate brand	$	203	$	223	$	220	$	237	$	219	$	235	$	232	$	241	$	883	$	927
Encompass brand	1		1		1		3		3		6		5		8		6		22
	204		224		221		240		222		241		237		249		889		949
Net premiums earned
Allstate brand	$	216	$	222	$	228	$	230	$	231	$	231	$	240	$	237	$	896	$	939
Encompass brand	1		2		2		4		5		6		7		9		9		27
	217		224		230		234		236		237		247		246		905		966
Incurred losses
Allstate brand	$	150	$	137	$	157	$	158	$	160	$	147	$	161	$	162	$	602	$	630
Encompass brand	1		2		2		4		4		4		6		6		9		20
	151		139		159		162		164		151		167		168		611		650
Expenses
Allstate brand	$	38	$	61	$	60	$	56	$	58	$	59	$	57	$	56	$	215	$	230
Encompass brand	2		1		1		1		2		3		2		3		5		10
	40		62		61		57		60		62		59		59		220		240
Underwriting Income
Allstate brand	$	28	$	24	$	11	$	16	$	13	$	25	$	22	$	19	$	79	$	79
Encompass brand	(2)		(1)		(1)		(1)		(1)		(1)		(1)		-		(5)		(3		)
	26		23		10		15		12		24		21		19		74		76
Loss ratio
Allstate brand	69.4		61.7		68.9		68.7		69.3		63.6		67.1		68.4		67.2		67.1
Encompass brand	100.0		100.0		100.0		100.0		80.0		66.7		85.7		66.7		100.0		74.1
Allstate Protection	69.6		62.0		69.2		69.2		69.5		63.7		67.6		68.3		67.5		67.3
Expense ratio
Allstate brand	17.6		27.5		26.3		24.3		25.1		25.6		23.7		23.6		24.0		24.5
Encompass brand	200.0		50.0		50.0		25.0		40.0		50.0		28.6		33.3		55.6		37.0
Allstate Protection	18.4		27.7		26.5		24.4		25.4		26.2		23.9		24.0		24.3		24.8
Combined ratio
Allstate brand	87.0		89.2		95.2		93.0		94.4		89.2		90.8		92.0		91.2		91.6
Encompass brand	300.0		150.0		150.0		125.0		120.0		116.7		114.3		100.0		155.6		111.1
Allstate Protection	88.0		89.7		95.7		93.6		94.9		89.9		91.5		92.3		91.8		92.1
Effect of catastrophe losses on loss ratio
Allstate brand	0.5		-		0.4		0.4		0.4		0.4		1.3		0.8		0.3		0.7
Encompass brand	-		-		-		-		-		-		-		-		-		-

Allstate brand non-standard auto domestic operating measures (1)
	Dec. 31,	Sept. 30,	June 30,	March 31,	Dec. 31,	Sept. 30,	June 30,	March 31,	Dec. 31,	Dec. 31,
	2010	2010	2010	2010	2009	2009	2009	2009	2010	2009
Operating measures (2)
Policies in force (in thousands)	640	671	706	724	719	733	743	750	640	719
New issued applications (in thousands)	63	70	77	99	84	91	86	102	309	363
Average premium - gross written ($)	627	630	619	619	625	613	612	615	624	616
Average premium - net earned ($)	576	571	573	571	574	578	583	591	573	582
Renewal ratio (%)	70.5	70.8	72.5	71.8	72.4	72.6	73.3	71.6	71.4	72.5
Loss trends
(% change year-over-year)
Bodily injury claim frequency	8.1	7.1	1.4	6.6	16.7	29.5	26.3	15.9	5.7	21.9
Property damage claim frequency	0.3	3.3	0.8	3.1	9.4	16.5	10.2	7.1	1.8	10.7

(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.

21

THE ALLSTATE CORPORATION

AUTO PROFITABILITY MEASURES

	Three months ended																Twelve months ended
	Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Dec. 31,
	2010		2010		2010		2010		2009		2009		2009		2009		2010		2009
Auto
($ in millions)
Net premiums written
Allstate brand	$	4,046	$	4,251	$	4,168	$	4,260	$	4,079	$	4,284	$	4,108	$	4,219	$	16,725	$	16,690
Encompass brand	150		167		170		163		174		214		222		212		650		822
	4,196		4,418		4,338		4,423		4,253		4,498		4,330		4,431		17,375		17,512
Net premiums earned
Allstate brand	$	4,157	$	4,183	$	4,197	$	4,173	$	4,175	$	4,177	$	4,168	$	4,154	$	16,710	$	16,674
Encompass brand	165		175		187		198		210		227		241		256		725		934
	4,322		4,358		4,384		4,371		4,385		4,404		4,409		4,410		17,435		17,608
Incurred losses
Allstate brand	$	3,091	$	2,860	$	2,940	$	2,897	$	2,889	$	2,855	$	2,940	$	2,858	$	11,788	$	11,542
Encompass brand	126		133		137		153		163		174		178		189		549		704
	3,217		2,993		3,077		3,050		3,052		3,029		3,118		3,047		12,337		12,246
Expenses
Allstate brand	$	1,028	$	1,031	$	1,029	$	1,041	$	1,023	$	1,008	$	1,006	$	1,016	$	4,129	$	4,053
Encompass brand	47		53		51		52		54		59		63		70		203		246
	1,075		1,084		1,080		1,093		1,077		1,067		1,069		1,086		4,332		4,299
Underwriting Income
Allstate brand	$	38	$	292	$	228	$	235	$	263	$	314	$	222	$	280	$	793	$	1,079
Encompass brand	(8)		(11)		(1)		(7)		(7)		(6)		-		(3)		(27)		(16		)
	30		281		227		228		256		308		222		277		766		1,063
Loss ratio
Allstate brand	74.4		68.4		70.1		69.4		69.2		68.4		70.6		68.8		70.6		69.2
Encompass brand	76.3		76.0		73.2		77.3		77.6		76.6		73.9		73.8		75.7		75.4
Allstate Protection	74.5		68.7		70.2		69.8		69.6		68.8		70.7		69.1		70.8		69.6
Expense ratio
Allstate brand	24.7		24.6		24.5		25.0		24.5		24.1		24.1		24.5		24.7		24.3
Encompass brand	28.5		30.3		27.3		26.2		25.7		26.0		26.1		27.4		28.0		26.3
Allstate Protection	24.8		24.9		24.6		25.0		24.6		24.2		24.3		24.6		24.8		24.4
Combined ratio
Allstate brand	99.1		93.0		94.6		94.4		93.7		92.5		94.7		93.3		95.3		93.5
Encompass brand	104.8		106.3		100.5		103.5		103.3		102.6		100.0		101.2		103.7		101.7
Allstate Protection	99.3		93.6		94.8		94.8		94.2		93.0		95.0		93.7		95.6		94.0
Effect of catastrophe losses on loss ratio
Allstate brand	0.8		0.4		1.9		0.7		(0.3)		1.3		2.1		1.6		0.9		1.2
Encompass brand	1.2		0.6		0.5		1.0		(0.5)		0.4		0.4		0.8		0.8		0.3
Effect of pre-tax reserve reestimates on combined ratio*
Allstate brand	(1.2)		(0.9)		(2.1)		(0.1)		(0.6)		0.1		(0.2)		(0.7)		(1.1)		(0.4		)
Encompass brand	(6.1)		(1.7)		1.6		5.1		(1.0)		3.1		1.7		(2.3)		-		0.3
Allstate brand auto domestic operating measures(1)
	Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Dec. 31,
	2010		2010		2010		2010		2009		2009		2009		2009		2010		2009
Operating measures (2)
Policies in force (in thousands)	18,124		18,150		18,235		18,305		18,463		18,507		18,579		18,593		18,124		18,463
New issued applications (in thousands)	589		607		575		563		572		615		582		623		2,334		2,392
Average premium - gross written ($)	449		449		452		451		449		443		438		438		450		442
Average premium - net earned ($)	438		437		439		436		434		432		431		431		438		432
Renewal ratio (%)	88.0		87.9		88.3		88.0		88.1		88.3		88.3		87.8		87.9		88.2
Loss trends
(% change year-over-year)
Bodily injury claim frequency	7.5		7.3		3.9		5.4		14.4		20.1		14.2		5.9		6.0		13.1
Property damage claim frequency	2.2		3.6		1.8		-		7.7		10.9		5.3		1.7		1.9		5.9
Paid severity - bodily injury	(0.2)		1.1		(1.0)		(1.3)		(4.9)		(0.9)		0.9		2.1		(0.3)		(0.7		)
Paid severity - property damage	(1.7)		1.0		(1.5)		0.4		0.1		(1.0)		0.5		(2.4)		(0.5)		(0.7		)

(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.

22

THE ALLSTATE CORPORATION

HOMEOWNERS PROFITABILITY MEASURES

	Three months ended																								Twelve months ended
	Dec. 31,			Sept. 30,			June 30,			March 31,			Dec. 31,			Sept. 30,			June 30,			March 31,			Dec. 31,			Dec. 31,
	2010			2010			2010			2010			2009			2009			2009			2009			2010			2009
Homeowners
($ in millions)
Net premiums written
Allstate brand	$	1,389		$	1,610		$	1,565		$	1,189		$	1,359		$	1,573		$	1,532		$	1,171		$	5,753		$	5,635
Encompass brand	85			98			94			80			89			110			112			97			357			408
	1,474			1,708			1,659			1,269			1,448			1,683			1,644			1,268			6,110			6,043
Net premiums earned
Allstate brand	$	1,431		$	1,430		$	1,416		$	1,416		$	1,411		$	1,396		$	1,409		$	1,417		$	5,693		$	5,633
Encompass brand	93			96			96			100			104			108			114			118			385			444
	1,524			1,526			1,512			1,516			1,515			1,504			1,523			1,535			6,078			6,077
Incurred losses
Allstate brand	$	1,113		$	1,151		$	1,169		$	1,239		$	919		$	1,053		$	1,340		$	1,172		$	4,672		$	4,484
Encompass brand	60			61			62			103			60			73			87			73			286			293
	1,173			1,212			1,231			1,342			979			1,126			1,427			1,245			4,958			4,777
Expenses
Allstate brand	$	346		$	346		$	309		$	337		$	337		$	319		$	299		$	341		$	1,338		$	1,296
Encompass brand	28			31			29			29			31			32			32			34			117			129
	374			377			338			366			368			351			331			375			1,455			1,425
Underwriting Income
Allstate brand	$	(28	)	$	(67	)	$	(62	)	$	(160	)	$	155		$	24		$	(230	)	$	(96	)	$	(317	)	$	(147	)
Encompass brand	5			4			5			(32		)	13			3			(5		)	11			(18		)	22
	(23		)	(63		)	(57		)	(192		)	168			27			(235		)	(85		)	(335		)	(125		)
Loss ratio
Allstate brand	77.8			80.5			82.6			87.5			65.1			75.4			95.1			82.7			82.1			79.6
Encompass brand	64.5			63.5			64.6			103.0			57.7			67.6			76.3			61.9			74.3			66.0
Allstate Protection	77.0			79.4			81.4			88.5			64.6			74.9			93.7			81.1			81.6			78.6
Expense ratio
Allstate brand	24.2			24.2			21.8			23.8			23.9			22.9			21.2			24.1			23.5			23.0
Encompass brand	30.1			32.3			30.2			29.0			29.8			29.6			28.1			28.8			30.4			29.0
Allstate Protection	24.5			24.7			22.4			24.2			24.3			23.3			21.7			24.4			23.9			23.5
Combined ratio
Allstate brand	102.0			104.7			104.4			111.3			89.0			98.3			116.3			106.8			105.6			102.6
Encompass brand	94.6			95.8			94.8			132.0			87.5			97.2			104.4			90.7			104.7			95.0
Allstate Protection	101.5			104.1			103.8			112.7			88.9			98.2			115.4			105.5			105.5			102.1
Effect of catastrophe losses on loss ratio
Allstate brand	30.3			23.1			34.7			37.1			20.6			22.3			45.8			27.5			31.3			29.0
Encompass brand	16.1			13.5			15.6			46.0			9.6			15.7			22.8			10.2			23.1			14.6
Effect of pre-tax reserve reestimates on combined ratio
Allstate brand	(1.8		)	5.2			(4.2		)	(0.4		)	(3.3		)	(5.2		)	(0.9		)	(1.2		)	(0.3		)	(2.6		)
Encompass brand	5.4			(7.3		)	(1.0		)	(2.0		)	(3.8		)	(1.9		)	1.8			(12.7		)	(1.3		)	(4.3		)
Allstate brand homeowners domestic operating measures (1)
	Dec. 31,			Sept. 30,			June 30,			March 31,			Dec. 31,			Sept. 30,			June 30,			March 31,			Dec. 31,			Dec. 31,
	2010			2010			2010			2010			2009			2009			2009			2009			2010			2009
Operating measures (2)
Policies in force (in thousands)	6,690			6,740			6,821			6,886			6,973			7,027			7,104			7,181			6,690			6,973
New issued applications (in thousands)	126			140			151			119			136			148			145			127			536			556
Average premium - gross written ($)	963			953			933			921			899			889			879			861			943			883
Average premium - net earned ($)	825			821			803			795			785			771			768			771			811			773
Renewal ratio (%)	88.5			88.6			88.3			88.0			88.4			88.5			88.0			87.5			88.4			88.1
Loss trends
(% change year-over-year)
Claim frequency excluding catastrophe losses	(8.5		)	(2.3		)	1.7			5.1			13.9			13.5			3.9			5.1			(1.1		)	9.0
Claim severity excluding catastrophe losses	4.1			2.1			(0.7		)	(2.1		)	(8.5		)	9.0			7.0			3.2			1.6			3.0

(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.

23

THE ALLSTATE CORPORATION

PROPERTY-LIABILITY

ALLSTATE BRAND DOMESTIC OPERATING MEASURES AND STATISTICS (1)

	Three months ended
	Dec. 31,	Sept. 30,	June 30,	March 31,	Dec. 31,	Sept. 30,	June 30,	March 31,
	2010	2010	2010	2010	2009	2009	2009	2009
Policies in Force (2)
(in thousands)
Standard auto	17,484	17,479	17,529	17,581	17,744	17,774	17,836	17,843
Non-standard auto	640	671	706	724	719	733	743	750
Auto	18,124	18,150	18,235	18,305	18,463	18,507	18,579	18,593
Homeowners	6,690	6,740	6,821	6,886	6,973	7,027	7,104	7,181
New Issued Applications (3)
(in thousands)
Standard auto	526	537	498	464	488	524	496	521
Non-standard auto	63	70	77	99	84	91	86	102
Auto	589	607	575	563	572	615	582	623
Homeowners	126	140	151	119	136	148	145	127
Average Premium - Gross Written ($) (4)
Standard auto	442	441	444	443	441	435	430	430
Non-standard auto	627	630	619	619	625	613	612	615
Auto	449	449	452	451	449	443	438	438
Homeowners	963	953	933	921	899	889	879	861
Average Premium - Net Earned ($) (5)
Standard auto	433	432	433	430	428	426	425	424
Non-standard auto	576	571	573	571	574	578	583	591
Auto	438	437	439	436	434	432	431	431
Homeowners	825	821	803	795	785	771	768	771
Renewal Ratio (%) (6)
Standard auto	88.4	88.7	89.0	88.8	88.8	89.1	89.0	88.6
Non-standard auto	70.5	70.8	72.5	71.8	72.4	72.6	73.3	71.6
Auto	88.0	87.9	88.3	88.0	88.1	88.3	88.3	87.8
Homeowners	88.5	88.6	88.3	88.0	88.4	88.5	88.0	87.5
Bodily Injury Claim Frequency
(% change year-over-year)
Standard auto	7.7	7.5	4.2	5.4	14.4	19.6	13.6	5.5
Non-standard auto	8.1	7.1	1.4	6.6	16.7	29.5	26.3	15.9
Auto	7.5	7.3	3.9	5.4	14.4	20.1	14.2	5.9
Property Damage Claim Frequency
(% change year-over-year)
Standard auto	2.4	3.7	1.9	(0.1)	7.6	10.7	5.1	1.6
Non-standard auto	0.3	3.3	0.8	3.1	9.4	16.5	10.2	7.1
Auto	2.2	3.6	1.8	-	7.7	10.9	5.3	1.7
Auto Paid Severity
(% change year-over-year)
Bodily injury	(0.2)	1.1	(1.0)	(1.3)	(4.9)	(0.9)	0.9	2.1
Property damage	(1.7)	1.0	(1.5)	0.4	0.1	(1.0)	0.5	(2.4)
Homeowners Excluding Catastrophe Losses
(% change year-over-year)
Claim frequency	(8.5)	(2.3)	1.7	5.1	13.9	13.5	3.9	5.1
Claim severity	4.1	2.1	(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, and premium refund accruals.  Average premiums represent the appropriate policy term for each line, which is 6 months for auto and 12 months for homeowners.

(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.

24

THE ALLSTATE CORPORATION

HOMEOWNERS SUPPLEMENTAL INFORMATION

($ in millions)

	Twelve months ended December 31, 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	$	74	$	73	98.6%	$	8	10.8%
Other hurricane exposure states	3,117		2,416		77.5%	809		26.0%
Total hurricane exposure states (2)	3,191		2,489		78.0%	817		25.6%			17		10.3%
Other catastrophe exposure states	2,887		2,469		85.5%	1,054		36.5%			24		8.2%
Total	$	6,078	$	4,958	81.6%	$	1,871	30.8%	90		41		9.6%
									1992 to 2010 Historical Information
	1992 to 2010 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	$	3,637	$	5,109	140.5%	$	3,560	97.9%	$	3,746	$	3,328	88.8%	$	1,778	47.5%
Other hurricane exposure states	41,697		33,381		80.1%	11,766		28.2%	41,765		33,313		79.8%	11,698		28.0%
Total hurricane exposure states (2)	45,334		38,490		84.9%	15,326		33.8%	45,511		36,641		80.5%	13,476		29.6%
Other catastrophe exposure states	38,784		29,451		75.9%	9,277		23.9%	38,785		27,609		71.2%	7,436		19.2%
Total	$	84,118	$	67,941	80.8%	$	24,603	29.2%	$	84,296	$	64,250	76.2%	$	20,912	24.8%	1,273

(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 - 2010, Incurred losses and Catastrophe losses for the Hurricane exposure states were adjusted to exclude $1.8 billion for losses related to Hurricane Andrew.  Incurred losses and Catastrophe losses for the Other catastrophe exposure states were adjusted to exclude an additional $1.8 billion for losses related to certain California earthquakes and Hawaii hurricanes.  Subsequent catastrophes of a similar magnitude are not excluded from the exhibit.  Through the use of the insurance mechanisms, Allstate may have a contingent liability for industry assessments and losses exceeding the claims paying capacity of these mechanisms as discussed in the Annual Report on Form 10-K.

(4) Earned Premiums

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

(5) Premium Rate Changes

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

25

THE ALLSTATE CORPORATION

PROPERTY-LIABILITY

EFFECT OF CATASTROPHE LOSSES ON THE COMBINED RATIO

($ in millions, except ratios)

										Excludes the effect of
										catastrophe losses relating to
										earthquakes and hurricanes
	Effect of all catastrophe losses on the Property-Liability					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	5.9	8.3	8.5	25,957		2,207		2,272		8.8
Average (2)	5.0	6.6	12.9	5.7	7.5							4.3
	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	5.9	8.3	8.5	25,957		2,207
Average(2)	4.1	6.4	10.8	4.5	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.

26

THE ALLSTATE CORPORATION

ALLSTATE PROTECTION HISTORICAL CATASTROPHE BY SIZE OF EVENT

($ in millions, except ratios)

Three months ended December 31, 2010
										Average
		Number			Claim and				Combined	catastrophe
Size of catastrophe		of events			claim expense				ratio impact	loss per event
Greater than $250 million		1	5.0	%	$	355	66.1	%	5.5	$	355
$101 million to $250 million		-	-		-		-		-	-
$50 million to $100 million		-	-		-		-		-	-
Less than $50 million		19	95.0		169		31.5		2.6	9
Total		20	100.0	%	524		97.6		8.1	26
Prior year reserve reestimates					(23)		(4.3)		(0.4)
Prior quarter reserve reestimates					36		6.7		0.6
Total catastrophe losses					$	537	100.0	%	8.3
Twelve months ended December 31, 2010
										Average
		Number			Claim and				Combined	catastrophe
Size of catastrophe		of events			claim expense				ratio impact	loss per event
Greater than $250 million		1	1.1	%	$	355	16.1	%	1.4	$	355
$101 million to $250 million		4	4.4		610		27.6		2.3	153
$50 million to $100 million		8	8.9		511		23.2		2.0	64
Less than $50 million		77	85.6		894		40.5		3.4	12
Total		90	100.0	%	2,370		107.4		9.1	26
Prior year reserve reestimates					(163)		(7.4)		(0.6)
Total catastrophe losses					$	2,207	100.0	%	8.5
1995 through December 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	13.9	%	1.0	$	3,592
Hurricane Rita - 2005	TX				891		3.4		0.2	891
Hurricane Ike - 2008	TX				864		3.3		0.2	864
Hurricane Ivan - 2004	FL				632		2.4		0.2	632
Hurricane Charley - 2004	FL				605		2.3		0.2	605
Hurricane Frances - 2004	FL				550		2.1		0.1	550
Hurricane Wilma - 2005	FL				539		2.1		0.1	539
Arizona Hail - 2010	AZ				355		1.4		0.1	355
Hurricane Jeanne - 2004	FL				337		1.3		0.1	337
October 2003 Fires	CA				300		1.2		0.1	300
Hurricane Gustav - 2008	LA				273		1.1		0.1	273
Greater than $250 million		11	1.0	%	8,938		34.5		2.4	813
$101 million to $250 million		20	1.8		3,079		11.9		0.8	154
$50 million to $100 million		55	5.1		3,813		14.7		1.0	69
Less than $50 million		998	92.1		10,079		38.9		2.7	10
Total		1,084	100.0	%	$	25,909	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.

27

THE ALLSTATE CORPORATION

PROPERTY-LIABILITY

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

($ in millions, except ratios)

	Three months ended																Twelve months ended
	Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Dec. 31,
	2010		2010		2010		2010		2009		2009		2009		2009		2010		2009
Pre-tax Reserve Reestimates (1)
Auto	$	(59)	$	(40)	$	(85)	$	5	$	(29)	$	11	$	(4)	$	(35)	$	(179)	$	(57)
Homeowners	(21)		67		(61)		(8)		(50)		(75)		(11)		(32)		(23)		(168)
Other personal lines	80		(38)		(5)		(22)		51		(3)		32		9		15		89
Allstate Protection (2)	-		(11)		(151)		(25)		(28)		(67)		17		(58)		(187)		(136)
Discontinued Lines and Coverages	3		22		1		2		3		15		3		3		28		24
Property-Liability	$	3	$	11	$	(150)	$	(23)	$	(25)	$	(52)	$	20	$	(55)	$	(159)	$	(112)
Allstate brand	$	5	$	-	$	(152)	$	(34)	$	(20)	$	(74)	$	9	$	(41)	$	(181)	$	(126)
Encompass brand	(5)		(11)		1		9		(8)		7		8		(17)		(6)		(10)
Allstate Protection (2)	$	-	$	(11)	$	(151)	$	(25)	$	(28)	$	(67)	$	17	$	(58)	$	(187)	$	(136)
Effect of Pre-tax Reserve
Reestimates on Combined Ratio (1)
Auto	(0.9)		(0.6)		(1.3)		0.1		(0.4)		0.2		-		(0.5)		(0.7)		(0.2)
Homeowners	(0.3)		1.0		(0.9)		(0.1)		(0.8)		(1.2)		(0.2)		(0.5)		(0.1)		(0.6)
Other personal lines	1.2		(0.6)		(0.1)		(0.4)		0.8		-		0.5		0.1		0.1		0.3
Allstate Protection (2)	-		(0.2)		(2.3)		(0.4)		(0.4)		(1.0)		0.3		(0.9)		(0.7)		(0.5)
Discontinued Lines and Coverages	0.1		0.4		-		-		-		0.3		-		0.1		0.1		0.1
Property-Liability	0.1		0.2		(2.3)		(0.4)		(0.4)		(0.7)		0.3		(0.8)		(0.6)		(0.4)
Allstate brand	0.1		-		(2.3)		(0.5)		(0.3)		(1.1)		0.2		(0.6)		(0.7)		(0.5)
Encompass brand	(0.1)		(0.2)		-		0.1		(0.1)		0.1		0.1		(0.3)		-		-
Allstate Protection (2)	-		(0.2)		(2.3)		(0.4)		(0.4)		(1.0)		0.3		(0.9)		(0.7)		(0.5)

(1)Favorable reserve reestimates are shown in parentheses.

(2)Favorable reserve reestimates included in catastrophe losses totaled $23 million and $30 million in the three months ended December 31, 2010 and 2009, respectively. Favorable reserve reestimates included in catastrophe losses totaled $163 million and $169 million in the twelve months ended December 31, 2010 and 2009, respectively.

28

THE ALLSTATE CORPORATION

PROPERTY-LIABILITY

HISTORICAL PRE-TAX PRIOR YEAR RESERVE REESTIMATES(1)

($ in millions)

	Twelve months ended December 31,
	2010		2009		2008		2007		2006
Allstate brand	$	(181)	$	(126)	$	155	$	(167)	$	(1,085)
Encompass brand	(6)		(10)		(3)		(52)		(18)
Allstate Protection	(187)		(136)		152		(219)		(1,103)
Discontinued Lines and Coverages	28		24		18		47		132
Property-Liability	$	(159)	$	(112)	$	170	$	(172)	$	(971)
Effect of Property-Liability pre-tax reserve reestimates on the combined ratio	(0.6)		(0.4)		0.7		(0.6)		(3.5)

(1)  Favorable reserve reestimates are shown in parentheses.

29

THE ALLSTATE CORPORATION

HISTORICAL PROPERTY-LIABILITY LOSS RESERVES

($ in millions)

	Twelve months ended December 31,
	2010			2009			2008			2007			2006
(net of reinsurance)
Net reserve for claims and claims expense, beginning of year	$	17,028		$	17,182		$	16,660		$	16,610		$	18,931
Claims and claims expense
Provision attributable to the current year	19,110			18,858			19,894			17,839			16,988
Change in provision attributable to prior years (1)	(159)			(112)			170			(172)			(971)
Total claims and claims expense	18,951			18,746			20,064			17,667			16,017
Payments
Claims and claims expense attributable to current year	(12,012)			(11,906)			(12,658)			(10,933)			(10,386)
Claims and claims expense attributable to prior years	(6,571)			(6,994)			(6,884)			(6,684)			(7,952)
Total payments	(18,583)			(18,900)			(19,542)			(17,617)			(18,338)
Net reserve for claims and claims expense, end of year (2)	$	17,396		$	17,028		$	17,182		$	16,660		$	16,610
Percent change in loss reserves	2.2		%	(0.9)		%	3.1		%	0.3		%	(12.3)		%
(1)    Reserve reestimates due to:
Asbestos and environmental claims	$	23		$	5		$	8		$	80		$	96
All other property-liability claims	(182)			(117)			162			(252)			(1,067)
Change in pre-tax reserve	$	(159)		$	(112)		$	170		$	(172)		$	(971)

(2)    Net reserves for claims and claims expense are net of expected reinsurance recoveries of $2.07 billion, $2.14 billion, $2.27 billion, $2.21 billion and $2.26 billion at December 31, 2010, 2009, 2008, 2007 and 2006, respectively.

30

THE ALLSTATE CORPORATION

ASBESTOS AND ENVIRONMENTAL RESERVES

($ in millions)

	Three months ended								Twelve months ended December 31,
	Dec. 31,		Sept. 30,		June 30,		March 31,
	2010		2010		2010		2010		2010		2009		2008		2007		2006
(net of reinsurance)
Asbestos claims
Beginning reserves	$	1,133	$	1,142	$	1,157	$	1,180	$	1,180	$	1,228	$	1,302	$	1,375	$	1,373
Incurred claims and claims expense	-		5		-		-		5		(8)		8		17		86
Claims and claims expense paid	(33)		(14)		(15)		(23)		(85)		(40)		(82)		(90)		(84)
Ending reserves	$	1,100	$	1,133	$	1,142	$	1,157	$	1,100	$	1,180	$	1,228	$	1,302	$	1,375
Claims and claims expense paid as a percent of ending reserves	3.0%		1.2%		1.3%		2.0%		7.7%		3.4%		6.7%		6.9%		6.1%
Environmental claims
Beginning reserves	$	205	$	190	$	197	$	198	$	198	$	195	$	232	$	194	$	205
Incurred claims and claims expense	-		18		-		-		18		13		-		63		10
Claims and claims expense paid	(4)		(3)		(7)		(1)		(15)		(10)		(37)		(25)		(21)
Ending reserves	$	201	$	205	$	190	$	197	$	201	$	198	$	195	$	232	$	194
Claims and claims expense paid as a percent of ending reserves	2.0%		1.5%		3.7%		0.5%		7.5%		5.1%		19.0%		10.8%		10.8%

31

THE ALLSTATE CORPORATION

ALLSTATE FINANCIAL RESULTS

($ in millions)

	Three months ended																	Twelve months ended
		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Dec. 31,
		2010		2010		2010		2010		2009		2009		2009		2009		2010		2009
Investments		$	61,582	$	62,915	$	61,804	$	62,336	$	62,216	$	61,891	$	59,861	$	59,576	$	61,582	$	62,216
Premiums and deposits *		$	962	$	1,011	$	1,018	$	1,105	$	1,156	$	1,033	$	1,399	$	1,533	$	4,096	$	5,121
Deposits to contractholder funds		(683)		(730)		(739)		(828)		(898)		(802)		(1,152)		(1,298)		(2,980)		(4,150)
Deposits to separate accounts		(25)		(25)		(25)		(26)		(27)		(27)		(28)		(28)		(101)		(110)
Change in unearned premiums and other adjustments		19		34		32		38		12		28		29		39		123		108
Life and annuity premiums		273		290		286		289		243		232		248		246		1,138		969
Contract charges		258		258		259		255		255		250		246		238		1,030		989
Premiums and contract charges		531		548		545		544		498		482		494		484		2,168		1,958
Net investment income		692		707		723		731		737		744		764		819		2,853		3,064
Periodic settlements and accruals on non-hedge derivative instruments		13		10		11		17		14		2		(3)		1		51		14
Contract benefits		(443)		(445)		(485)		(442)		(441)		(382)		(407)		(387)		(1,815)		(1,617)
Interest credited to contractholder funds		(439)		(446)		(450)		(463)		(479)		(497)		(520)		(542)		(1,798)		(2,038)
Amortization of deferred policy acquisition costs		(86)		(101)		(41)		(58)		(90)		(108)		(130)		(109)		(286)		(437)
Operating costs and expenses (1)		(115)		(118)		(116)		(120)		(105)		(99)		(105)		(121)		(469)		(430)
Restructuring and related charges		2		-		1		-		(1)		(4)		(2)		(18)		3		(25)
Income tax expense on operations		(51)		(47)		(63)		(70)		(38)		(43)		(26)		(42)		(231)		(149)
Operating income (2)		104		108		125		139		95		95		65		85		476		340
Realized capital gains and losses, after-tax		23		(25)		(230)		(105)		(178)		(151)		82		(170)		(337)		(417)
DAC and DSI (amortization) accretion relating to realized capital gains and losses, after-tax		(43)		7		4		(2)		(45)		18		(131)		(19)		(34)		(177)
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		(8)		(7)		(7)		(11)		(9)		(1)		2		(1)		(33)		(9)
Gain on disposition of operations, after-tax		-		2		1		1		-		1		1		2		4		4
Net income (loss)		$	76	$	85	$	(107)	$	4	$	(137)	$	(38)	$	19	$	(327)	$	58	$	(483)

(1)

Operating costs and expenses increased $10 million and $39 million in the three months and twelve months ended December 31, 2010, respectively, compared to the same periods in 2009. The increase in the three months ended December 31, 2010 was primarily due to non-recurring litigation costs, higher non-deferrable commissions related to accident and health insurance business and higher product development costs. The increase in the twelve months ended December 31, 2010 was primarily due to increased non-deferrable acquisition costs, higher product development, marketing and technology costs, increased litigation expenses, lower reinsurance expense allowances resulting from higher retention and increases in the net costs of employee benefits.  In the twelve months ended December 31, 2010, these increased costs were partially offset by Allstate Financial expense reduction act ions, which resulted in lower employee, professional services and sales support expenses.

(2)

Operating income in the three months ended June 30, 2010 included a $7 million after-tax reinsurance recovery and $5 million after-tax favorable net impact or reserve reestimates.  Operating income in the three months ended March 31, 2010 included a $26 million favorable after-tax DAC unlock.

32

THE ALLSTATE CORPORATION

HISTORICAL ALLSTATE FINANCIAL RESULTS

($ in millions)

	At or for the Year Ended December 31,
	2010		2009		2008		2007		2006
Investments	$	61,582	$	62,216	$	61,449	$	74,256	$	75,951
Premiums and deposits	$	4,096	$	5,121	$	10,952	$	9,627	$	11,678
Deposits to contractholder funds	(2,980)		(4,150)		(9,984)		(8,632)		(10,066)
Deposits to separate accounts	(101)		(110)		(129)		(136)		(713)
Change in unearned premiums and other adjustments	123		108		104		11		-
Life and annuity premiums	1,138		969		943		870		899
Contract charges	1,030		989		952		996		1,065
Premiums and contract charges	2,168		1,958		1,895		1,866		1,964
Net investment income	2,853		3,064		3,811		4,297		4,173
Periodic settlements and accruals on non-hedge derivative instruments	51		14		20		46		56
Contract benefits	(1,815)		(1,617)		(1,612)		(1,589)		(1,570)
Interest credited to contractholder funds	(1,798)		(2,038)		(2,417)		(2,682)		(2,614)
Operating costs and expenses (1)	(755)		(867)		(1,051)		(1,042)		(1,117)
Restructuring and related charges	3		(25)		(1)		(2)		(24)
Income tax expense on operations	(231)		(149)		(207)		(279)		(274)
Operating income	476		340		438		615		594
Realized capital gains and losses, after-tax (2)	(389)		(818)		(1,923)		(113)		(14)
Non-recurring items, after-tax (3)	-		-		(219)		-		(18)
Reclassification of periodic settlements and accruals on non-hedge derivative instruments, after-tax	(33)		(9)		(13)		(29)		(36)
Gain (loss) on disposition of operations, after-tax	4		4		(4)		(8)		(62)
Net income (loss)	$	58	$	(483)	$	(1,721)	$	465	$	464
Life insurance in force, net of reinsurance	$	294,125	$	281,961	$	280,042	$	271,035	$	254,726

(1)Includes amortization expense on DAC, excluding the portion relating to realized capital gains and losses.

(2)Includes amortization expense on DAC and DSI relating to realized capital gains and losses, after-tax.

(3)During the fourth quarter of 2008, for traditional life insurance and immediate annuities with life contingencies, an aggregate premium deficiency of $336 million, pre-tax ($219 million, after-tax) resulted primarily from an experience study indicating that the annuitants on certain life-contingent contracts are projected to live longer than we anticipated when the contracts were issued, and, to a lesser degree, a reduction in the related investment portfolio yield.  The deficiency was recorded through a reduction in deferred acquisition costs.

33

THE ALLSTATE CORPORATION

ALLSTATE FINANCIAL PREMIUMS, CONTRACT CHARGES AND DEPOSITS

($ in millions)

	Three months ended																Twelve months ended
	Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Dec. 31,
	2010		2010		2010		2010		2009		2009		2009		2009		2010		2009
PREMIUMS AND CONTRACT CHARGES - BY PRODUCT
Underwritten Products
Traditional life insurance premiums	$	103	$	107	$	104	$	106	$	104	$	103	$	100	$	100	$	420	$	407
Accident and health insurance premiums	157		157		151		156		120		114		114		112		621		460
Interest-sensitive life insurance contract charges	251		249		249		242		245		238		235		226		991		944
	511		513		504		504		469		455		449		438		2,032		1,811
Annuities
Immediate annuities with life contingencies premiums	13		26		31		27		19		15		34		34		97		102
Other fixed annuity contract charges	7		9		10		13		10		12		11		12		39		45
	20		35		41		40		29		27		45		46		136		147
Total	$	531	$	548	$	545	$	544	$	498	$	482	$	494	$	484	$	2,168	$	1,958
PREMIUMS AND CONTRACT CHARGES - BY DISTRIBUTION CHANNEL
Allstate agencies	$	253	$	247	$	247	$	246	$	249	$	239	$	240	$	237	$	993	$	965
Workplace enrolling agents	166		166		161		161		126		124		121		119		654		490
Other	112		135		137		137		123		119		133		128		521		503
Total	$	531	$	548	$	545	$	544	$	498	$	482	$	494	$	484	$	2,168	$	1,958
PREMIUMS AND DEPOSITS - BY PRODUCT
Interest-sensitive life insurance	$	353	$	359	$	387	$	389	$	384	$	355	$	356	$	341	$	1,488	$	1,436
Fixed annuities	193		249		266		319		369		357		669		669		1,027		2,064
Traditional life and accident and health insurance	277		262		253		256		242		217		215		202		1,048		876
Bank deposits	139		141		112		141		161		104		159		321		533		745
Total	$	962	$	1,011	$	1,018	$	1,105	$	1,156	$	1,033	$	1,399	$	1,533	$	4,096	$	5,121

34

THE ALLSTATE CORPORATION

CHANGE IN CONTRACTHOLDER FUNDS

($ in millions)

	Three months ended																Twelve months ended
	Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Dec. 31,
	2010		2010		2010		2010		2009		2009		2009		2009		2010		2009
Beginning balance	$	48,936	$	49,443	$	51,027	$	52,582	$	53,336	$	53,999	$	56,621	$	58,413	$	52,582	$	58,413
Deposits
Fixed annuities	180		224		237		291		351		343		635		635		932		1,964
Interest-sensitive life insurance	363		363		391		395		384		355		357		342		1,512		1,438
Bank and other deposits	246		262		234		252		275		208		268		427		994		1,178
Total deposits	789		849		862		938		1,010		906		1,260		1,404		3,438		4,580
Interest credited	439		445		448		462		481		498		515		531		1,794		2,025
Maturities, benefits, withdrawals and other adjustments
Maturities and retirements of institutional products	(49)		(3)		(827)		(954)		(58)		(212)		(2,552)		(1,951)		(1,833)		(4,773)
Benefits	(365)		(397)		(395)		(395)		(353)		(379)		(406)		(450)		(1,552)		(1,588)
Surrenders and partial withdrawals	(1,305)		(1,295)		(1,355)		(1,248)		(1,540)		(1,184)		(1,235)		(1,213)		(5,203)		(5,172)
Contract charges	(252)		(247)		(243)		(241)		(238)		(232)		(227)		(221)		(983)		(918)
Net transfers from separate accounts	3		3		3		2		3		2		2		4		11		11
Fair value hedge adjustments for institutional products	(23)		24		(74)		(123)		(6)		1		78		(48)		(196)		25
Other adjustments	22		114		(3)		4		(53)		(63)		(57)		152		137		(21)
Total maturities, benefits, withdrawals and other adjustments	(1,969)		(1,801)		(2,894)		(2,955)		(2,245)		(2,067)		(4,397)		(3,727)		(9,619)		(12,436)
Ending balance	$	48,195	$	48,936	$	49,443	$	51,027	$	52,582	$	53,336	$	53,999	$	56,621	$	48,195	$	52,582

35

THE ALLSTATE CORPORATION

ALLSTATE FINANCIAL ANALYSIS OF NET INCOME

($ in millions)

	Three months ended																	Twelve months ended
		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Dec. 31,
		2010		2010		2010		2010		2009		2009		2009		2009		2010		2009
Benefit spread
Premiums		$	273	$	290	$	286	$	289	$	243	$	232	$	248	$	246	$	1,138	$	969
Cost of insurance contract charges (1)		161		161		159		156		158		156		150		152		637		616
Contract benefits excluding the implied interest on immediate annuities with life contingencies (2)		(307)		(310)		(346)		(303)		(301)		(243)		(267)		(248)		(1,266)		(1,059)
Total benefit spread		127		141		99		142		100		145		131		150		509		526
Investment spread
Net investment income		692		707		723		731		737		744		764		819		2,853		3,064
Implied interest on immediate annuities with life contingencies (2)		(136)		(135)		(139)		(139)		(140)		(139)		(140)		(139)		(549)		(558)
Interest credited to contractholder funds		(449)		(445)		(450)		(463)		(490)		(496)		(561)		(579)		(1,807)		(2,126)
Total investment spread		107		127		134		129		107		109		63		101		497		380
Surrender charges and contract maintenance expense fees(1)		97		97		100		99		97		94		96		86		393		373
Realized capital gains and losses		36		(38)		(353)		(162)		(275)		(234)		121		(43)		(517)		(431)
Amortization of deferred policy acquisition costs		(141)		(91)		(35)		(89)		(148)		(80)		(289)		(448)		(356)		(965)
Operating costs and expenses		(115)		(118)		(116)		(120)		(105)		(99)		(105)		(121)		(469)		(430)
Restructuring and related charges		2		—		1		—		(1)		(4)		(2)		(18)		3		(25)
(Loss) gain on disposition of operations		(1)		4		2		1		1		2		1		3		6		7
Income tax (expense) benefit on operations		(36)		(37)		61		4		87		29		3		(37)		(8)		82
Net income (loss)		$	76	$	85	$	(107)	$	4	$	(137)	$	(38)	$	19	$	(327)	$	58	$	(483)
Benefit spread by product group
Life insurance		$	78	$	93	$	23	$	88	$	68	$	96	$	96	$	103	$	282	$	363
Accident and health insurance		63		65		60		64		47		50		50		49		252		196
Annuities		(14)		(17)		16		(10)		(15)		(1)		(15)		(2)		(25)		(33)
Total benefit spread		$	127	$	141	$	99	$	142	$	100	$	145	$	131	$	150	$	509	$	526
Investment spread by product group
Annuities and institutional products		$	31	$	44	$	54	$	50	$	45	$	44	$	3	$	34	$	179	$	126
Life insurance		11		11		6		7		1		(2)		7		(3)		35		3
Allstate Bank products		7		8		8		8		9		8		7		6		31		30
Accident and health insurance		5		5		4		4		3		5		4		4		18		16
Net investment income on investments supporting capital		53		59		62		60		49		54		42		60		234		205
Total investment spread		$	107	$	127	$	134	$	129	$	107	$	109	$	63	$	101	$	497	$	380
(1) Reconciliation of contract charges
Cost of insurance contract charges		$	161	$	161	$	159	$	156	$	158	$	156	$	150	$	152	$	637	$	616
Surrender charges and contract maintenance expense fees		97		97		100		99		97		94		96		86		393		373
Total contract charges		$	258	$	258	$	259	$	255	$	255	$	250	$	246	$	238	$	1,030	$	989
(2) Reconciliation of contract benefits
Contract benefits excluding the implied interest on immediate annuities with life contingencies		$	(307)	$	(310)	$	(346)	$	(303)	$	(301)	$	(243)	$	(267)	$	(248)	$	(1,266)	$	(1,059)
Implied interest on immediate annuities with life contingencies		(136)		(135)		(139)		(139)		(140)		(139)		(140)		(139)		(549)		(558)
Total contract benefits		$	(443)	$	(445)	$	(485)	$	(442)	$	(441)	$	(382)	$	(407)	$	(387)	$	(1,815)	$	(1,617)

36

THE ALLSTATE CORPORATION

ALLSTATE FINANCIAL WEIGHTED AVERAGE INVESTMENT SPREADS

	Three months ended December 31, 2010						Three months ended December 31, 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	5.4	%	4.3	%	1.1	%	5.9	%	4.6	%	1.3	%
Deferred fixed annuities and institutional products	4.3		3.3		1.0		4.4		3.3		1.1
Immediate fixed annuities with and without life contingencies	6.5		6.3		0.2		6.3		6.5		(0.2)
Investments supporting capital, traditional life and other products	3.6		N/A		N/A		3.7		N/A		N/A

	Twelve months ended December 31, 2010						Twelve months ended December 31, 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	%	5.5	%	4.6	%	0.9	%
Deferred fixed annuities and institutional products	4.4		3.2		1.2		4.5		3.4		1.1
Immediate fixed annuities with and without life contingencies	6.4		6.4		—		6.3		6.5		(0.2)
Investments supporting capital, traditional life and other products	3.7		N/A		N/A		3.7		N/A		N/A

37

THE ALLSTATE CORPORATION

CORPORATE AND OTHER RESULTS

($ in millions)

	Three months ended																Twelve months ended
	Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Dec. 31,
	2010		2010		2010		2010		2009		2009		2009		2009		2010		2009
Net investment income	$	15	$	14	$	16	$	15	$	15	$	14	$	10	$	13	$	60	$	52
Operating costs and expenses	(86)		(95)		(101)		(97)		(108)		(109)		(103)		(90)		(379)		(410)
Income tax benefit on operations	32		31		33		32		36		37		36		32		128		141
Operating loss	(39)		(50)		(52)		(50)		(57)		(58)		(57)		(45)		(191)		(217)
Realized capital gains and losses,
after-tax	(1)		1		5		2		5		3		5		(2)		7		11
Net loss	$	(40)	$	(49)	$	(47)	$	(48)	$	(52)	$	(55)	$	(52)	$	(47)	$	(184)	$	(206)

38

THE ALLSTATE CORPORATION

INVESTMENTS

($ in millions)

	PROPERTY-LIABILITY											ALLSTATE FINANCIAL
		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,			Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,
		2010		2010		2010		2010		2009			2010		2010		2010		2010		2009
Fixed income securities, at fair value:
Tax-exempt		$	9,394	$	10,287	$	12,067	$	13,181	$	14,294		$	62	$	63	$	64	$	64	$	64
Taxable		18,019		19,135		17,089		15,552		12,991			49,872		51,477		50,483		50,246		49,222
Equity securities, at fair value		4,578		3,499		3,063		3,580		4,840			233		208		191		227		184
Mortgage loans		18		28		38		50		50			6,661		6,933		7,135		7,589		7,885
Limited partnership interests		2,506		2,289		2,014		1,744		1,674			1,274		1,128		1,067		1,023		1,032
Short-term, at fair value		430		454		655		608		503			1,297		1,038		947		1,074		1,697
Other		103		53		139		94		174			2,183		2,068		1,917		2,113		2,132
Total		$	35,048	$	35,745	$	35,065	$	34,809	$	34,526		$	61,582	$	62,915	$	61,804	$	62,336	$	62,216
Fixed income securities, at amortized cost:
Tax-exempt		$	9,399	$	9,900	$	11,804	$	13,041	$	14,177		$	59	$	59	$	60	$	60	$	60
Taxable		17,981		18,853		17,097		15,793		13,414			49,130		49,809		50,301		51,392		51,435
Ratio of fair value to amortized cost		100.1%		102.3%		100.9%		99.6%		98.9%			101.5%		103.4%		100.4%		97.8%		95.7%
Equity securities, at cost		$	4,043	$	3,266	$	3,175	$	3,253	$	4,685		$	185	$	181	$	181	$	183	$	160
Short-term, at amortized cost		430		454		655		608		503			1,297		1,038		947		1,074		1,697
	CORPORATE AND OTHER											CONSOLIDATED
		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,			Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,
		2010		2010		2010		2010		2009			2010		2010		2010		2010		2009
Fixed income securities, at fair value:
Tax-exempt		$	658	$	618	$	613	$	652	$	670		$	10,114	$	10,968	$	12,744	$	13,897	$	15,028
Taxable		1,607		1,613		1,609		1,589		1,525			69,498		72,225		69,181		67,387		63,738
Equity securities, at fair value		-		-		-		-		-			4,811		3,707		3,254		3,807		5,024
Mortgage loans		-		-		-		-		-			6,679		6,961		7,173		7,639		7,935
Limited partnership interests		36		37		38		35		38			3,816		3,454		3,119		2,802		2,744
Short-term, at fair value		1,552		1,284		812		800		856			3,279		2,776		2,414		2,482		3,056
Other		-		2		2		2		2			2,286		2,123		2,058		2,209		2,308
Total		$	3,853	$	3,554	$	3,074	$	3,078	$	3,091		$	100,483	$	102,214	$	99,943	$	100,223	$	99,833
Fixed income securities, at amortized cost:
Tax-exempt		$	637	$	585	$	582	$	619	$	632		$	10,095	$	10,544	$	12,446	$	13,720	$	14,869
Taxable		1,580		1,580		1,581		1,581		1,525			68,691		70,242		68,979		68,766		66,374
Ratio of fair value to amortized cost		102.2%		103.0%		102.7%		101.9%		101.8%			101.0%		103.0%		100.6%		98.5%		97.0%
Equity securities, at cost		$	-	$	-	$	-	$	-	$	-		$	4,228	$	3,447	$	3,356	$	3,436	$	4,845
Short-term, at amortized cost		1,552		1,284		812		800		856			3,279		2,776		2,414		2,482		3,056

39

THE ALLSTATE CORPORATION

UNREALIZED NET CAPITAL GAINS AND LOSSES ON SECURITY PORTFOLIO BY TYPE

($ in millions)

	December 31, 2010					September 30, 2010					June 30, 2010
	Unrealized net				Fair value	Unrealized net				Fair value	Unrealized net				Fair value
	capital gains		Fair		as a percent of	capital gains		Fair		as a percent of	capital gains		Fair		as a percent of
	and losses		value		amortized cost (1)	and losses		value		amortized cost (1)	and losses		value		amortized cost (1)
Fixed income securities
U.S. government and agencies	$	276	$	8,596	103.3	$	532	$	11,253	105.0	$	512	$	9,185	105.9
Municipal	(267)		15,934		98.4	402		16,768		102.5	89		18,849		100.5
Corporate	1,395		37,655		103.8	2,334		37,204		106.7	1,445		35,935		104.2
Foreign government	337		3,158		111.9	482		3,428		116.4	350		3,252		112.1
Residential mortgage-backed securities (“RMBS”)	(516)		7,993		93.9	(693)		8,499		92.5	(954)		8,961		90.4
Commercial mortgage-backed securities (“CMBS”)	(219)		1,994		90.1	(382)		1,993		83.9	(553)		2,132		79.4
Asset-backed securities (“ABS”)	(181)		4,244		95.9	(270)		4,010		93.7	(390)		3,572		90.2
Redeemable preferred stock	1		38		102.7	2		38		105.6	1		39		102.6
Total fixed income securities	826		79,612		101.0	2,407		83,193		103.0	500		81,925		100.6
Equity securities	583		4,811		113.8	260		3,707		107.5	(102)		3,254		97.0
Short-term investments	-		3,279		100.0	-		2,776		100.0	-		2,414		100.0
Derivatives	(22)		439		95.2	(17)		318		94.9	2		283		100.7
Unrealized net capital gains and losses, pre-tax	$	1,387	$	88,141	101.6	$	2,650	$	89,994	103.0	$	400	$	87,876	100.5
Amounts recognized for:
Insurance reserves (2)	(41)					(608)					(292)
DAC and DSI (3)	97					(49)					403
Amounts recognized	56					(657)					111
Deferred income taxes	(508)					(701)					(183)
Unrealized net capital gains and losses, after-tax	$	935				$	1,292				$	328
	March 31, 2010					December 31, 2009					September 30, 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)
Fixed income securities
U.S. government and agencies	$	218	$	8,422	102.7	$	203	$	7,536	102.8	$	255	$	8,132	103.2
Municipal	(256)		20,148		98.7	(403)		21,280		98.1	39		22,167		100.2
Corporate	914		34,499		102.7	345		33,115		101.1	206		32,059		100.6
Foreign government	306		3,314		110.2	291		3,197		110.0	330		2,874		113.0
RMBS	(1,231)		9,112		88.1	(1,500)		7,987		84.2	(1,756)		8,077		82.1
CMBS	(768)		2,452		76.1	(925)		2,586		73.7	(1,159)		2,578		69.0
ABS	(387)		3,297		89.5	(488)		3,026		86.1	(720)		2,637		78.6
Redeemable preferred stock	2		40		105.3	-		39		100.0	(1)		37		97.4
Total fixed income securities	(1,202)		81,284		98.5	(2,477)		78,766		97.0	(2,806)		78,561		96.6
Equity securities	371		3,807		110.8	179		5,024		103.7	329		4,603		107.7
Short-term investments	-		2,482		100.0	-		3,056		100.0	-		3,470		100.0
Derivatives	(18)		437		96.0	(23)		548		96.0	(24)		538		95.7
Unrealized net capital gains and losses, pre-tax	$	(849)	$	88,010	99.0	$	(2,321)	$	87,394	97.4	$	(2,501)	$	87,172	97.2
Amounts recognized for:
Insurance reserves (2)	-					-					-
DAC and DSI (3)	726					990					2,679
Amounts recognized	726					990					2,679
Deferred income taxes	39					461					(66)
Unrealized net capital gains and losses, after-tax	$	(84)				$	(870)				$	112

(1)The comparison of 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 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.

40

THE ALLSTATE CORPORATION

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

($ in millions)

	As of December 31, 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	$	4,378	$	4,282	$	118	$	(154)	$	4,246	97.8	%	97.0	%
Utilities	6,209		6,227		433		(58)		6,602		100.3		106.3
Consumer goods (cyclical and non-cyclical)	6,236		6,318		305		(53)		6,570		101.3		105.4
Financial services	3,619		3,553		141		(36)		3,658		98.2		101.1
Capital goods	3,862		3,867		238		(34)		4,071		100.1		105.4
Transportation	1,911		1,925		99		(29)		1,995		100.7		104.4
Basic industry	1,726		1,750		91		(14)		1,827		101.4		105.9
Technology	1,613		1,641		72		(14)		1,699		101.7		105.3
Energy	2,455		2,480		136		(9)		2,607		101.0		106.2
Communications	2,139		2,117		115		(9)		2,223		99.0		103.9
FDIC guaranteed	721		724		3		-		727		100.4		100.8
Other	1,502		1,376		65		(11)		1,430		91.6		95.2
Total corporate fixed income portfolio	36,371		36,260		1,816		(421)		37,655		99.7		103.5
U.S. government and agencies	8,904		8,320		327		(51)		8,596		93.4		96.5
Municipal	20,323		16,201		379		(646)		15,934		79.7		78.4
Foreign government	3,270		2,821		347		(10)		3,158		86.3		96.6
RMBS	9,231		8,509		216		(732)		7,993		92.2		86.6
CMBS	2,227		2,213		58		(277)		1,994		99.4		89.5
ABS	4,796		4,425		113		(294)		4,244		92.3		88.5
Redeemable preferred stock	38		37		1		-		38		97.4		100.0
Total fixed income securities	$	85,160	$	78,786	$	3,257	$	(2,431)	$	79,612	92.5		93.5

(1)Included in par value are zero-coupon securities that are generally purchased at a deep discount to the par value that is received at maturity.  These primarily included corporate, U.S. government and agencies, municipal and foreign government zero-coupon securities with par value of $723 million, $1.70 billion, $5.82 billion and $1.36 billion, respectively.

(2)Excluding the impact of zero-coupon securities, the percentage of amortized cost to par value would be 100.1% for corporates, 101.8% for U.S. government and agencies, 99.6% for municipals and 103.7% for foreign governments.  Similarly, excluding the impact of zero-coupon securities, the percentage of fair value to par value would be 103.9% for corporates, 103.2% for U.S. government and agencies, 98.8% for municipals and 109.7% for foreign governments.

41

THE ALLSTATE CORPORATION

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

($ in millions)

	As of December 31, 2010
	Aaa				Aa				A				Baa				Ba or lower (1)				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized		Par		Fair		Unrealized
	value		gain/(loss)		value		gain/(loss)		value		gain/(loss)		value		gain/(loss)		value		gain/(loss)		value		value		gain/(loss)
U.S. government and agencies	$	8,596	$	276	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	8,904	$	8,596	$	276
Municipal
Tax exempt	1,384		81		4,357		76		2,454		(7)		1,342		(46)		577		(85)		11,144		10,114		19
Taxable	193		(2)		2,619		(18)		1,110		(38)		495		(74)		137		(47)		7,806		4,554		(179)
Auction rate securities	893		(51)		61		(6)		113		(16)		101		(14)		98		(20)		1,373		1,266		(107)
Sub-total	2,470		28		7,037		52		3,677		(61)		1,938		(134)		812		(152)		20,323		15,934		(267)
Corporate
Public	1,604		21		2,771		98		7,939		367		8,917		402		1,909		69		22,022		23,140		957
Privately placed	936		14		1,881		50		3,917		169		6,241		174		1,540		31		14,349		14,515		438
Sub-total	2,540		35		4,652		148		11,856		536		15,158		576		3,449		100		36,371		37,655		1,395
Foreign government	1,766		257		479		22		537		36		376		22		-		-		3,270		3,158		337
RMBS
U.S. government sponsored entities	4,728		147		-		-		-		-		-		-		-		-		4,511		4,728		147
Prime residential mortgage-backed securities	434		4		71		(1)		197		2		8		-		517		(5)		1,302		1,227		-
Alt-A residential mortgage-backed securities	40		(2)		62		(6)		102		(5)		39		(4)		406		(96)		1,003		649		(113)
Subprime residential mortgage-backed securities	88		(3)		297		(67)		89		(23)		98		(24)		817		(433)		2,415		1,389		(550)
Sub-total	5,290		146		430		(74)		388		(26)		145		(28)		1,740		(534)		9,231		7,993		(516)
CMBS	1,134		42		241		(9)		151		(18)		331		(100)		137		(134)		2,227		1,994		(219)
ABS
Collateralized debt obligations	30		(1)		628		(14)		481		(44)		282		(72)		489		(70)		2,467		1,910		(201)
Consumer and other asset-backed securities	1,343		22		405		3		363		-		198		-		25		(5)		2,329		2,334		20
Sub-total	1,373		21		1,033		(11)		844		(44)		480		(72)		514		(75)		4,796		4,244		(181)
Redeemable preferred stock	-		-		1		-		2		-		30		1		5		-		38		38		1
Total fixed income securities	$	23,169	$	805	$	13,873	$	128	$	17,455	$	423	$	18,458	$	265	$	6,657	$	(795)	$	85,160	$	79,612	$	826

(1) Securities rated below investment grade comprise securities with a rating of Ba or lower. As of December 31, 2010, 68% of below investment grade gross unrealized losses were concentrated in RMBS, specifically Alt-A and Subprime, CMBS and ABS, specifically cash flow CLO. The fair value of these securities totaled $1.39 billion, an increase of 7.8%, compared to $1.29 billion as of December 31, 2009, due to improved valuations resulting from tighter credit spreads driven by lower risk premiums. Gross unrealized losses on these securities totaled $736 million as of December 31, 2010, a decrease of 42.6%, compared to $1.28 billion as of December 31, 2009, due to improved valuations, impairment write-downs, sales and principal collections, partially offset by the downgrade of certain securities to below investment grade during 2010.

42

THE ALLSTATE CORPORATION

REALIZED CAPITAL GAINS AND LOSSES BY TRANSACTION TYPE

($ in millions)

	Three months ended																Twelve months ended
	Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Dec. 31,
	2010		2010		2010		2010		2009		2009		2009		2009		2010		2009
Impairment write-downs(1)	$	(198)	$	(137)	$	(239)	$	(223)	$	(270)	$	(381)	$	(291)	$	(620)	$	(797)	$	(1,562)
Change in intent write-downs (2)	(75)		(30)		(67)		(32)		(215)		(11)		(26)		(105)		(204)		(357)
Net other-than-temporary impairment losses recognized in earnings	(273)		(167)		(306)		(255)		(485)		(392)		(317)		(725)		(1,001)		(1,919)
Sales	134		319		145		88		390		201		263		418		686		1,272
Valuation of derivative instruments	144		(133)		(283)		(155)		166		(269)		367		103		(427)		367
Settlements of derivative instruments	35		(152)		(27)		(30)		(110)		(92)		52		(12)		(174)		(162)
EMA limited partnership income	76		(11)		20		4		6		33		(37)		(143)		89		(141)
Total	$	116	$	(144)	$	(451)	$	(348)	$	(33)	$	(519)	$	328	$	(359)	$	(827)	$	(583)

(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.

43

THE ALLSTATE CORPORATION

PROPERTY-LIABILITY

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

($ in millions)

	Three months ended																	Twelve months ended
		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Dec. 31,
		2010		2010		2010		2010		2009		2009		2009		2009		2010		2009
NET INVESTMENT INCOME
Fixed income securities:
Tax-exempt		$	118	$	132	$	153	$	165	$	180	$	204	$	217	$	225	$	568	$	826
Taxable		154		152		143		130		126		120		111		109		579		466
Equity securities		25		16		23		20		29		13		18		15		84		75
Mortgage loans		1		-		-		1		-		2		1		1		2		4
Cost limited partnership interests  (1)		10		3		3		3		4		2		2		1		19		9
Short-term		-		1		1		1		2		1		1		3		3		7
Other		1		1		5		1		1		2		-		1		8		4
Sub-total		309		305		328		321		342		344		350		355		1,263		1,391
Less:  Investment expense		(18)		(21)		(18)		(17)		(18)		(18)		(16)		(11)		(74)		(63)
Net investment income		$	291	$	284	$	310	$	304	$	324	$	326	$	334	$	344	$	1,189	$	1,328
Net investment income, after-tax		$	225	$	225	$	249	$	247	$	266	$	273	$	282	$	290	$	946	$	1,111
PRE-TAX YIELDS (2)
Fixed income securities:
Tax-exempt		4.9		4.9		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		7.1		7.1		7.3		7.3		7.6		7.1		7.4
Taxable		3.4		3.4		3.5		3.5		3.7		3.9		4.2		4.7		3.5		4.1
Equity securities		2.7		2.0		2.9		2.0		2.7		1.5		2.2		2.1		2.3		2.1
Mortgage loans		7.1		4.2		5.4		6.0		5.0		4.5		4.5		4.5		5.7		4.7
Cost limited partnership interests (3)		5.8		2.0		1.8		2.4		2.5		1.7		1.1		0.7		3.1		1.5
Total portfolio  (3)(4)		3.8		3.7		3.9		3.8		4.1		4.0		4.3		4.4		3.8		4.2
REALIZED CAPITAL GAINS AND LOSSES (PRE-TAX) BY ASSET TYPE
Fixed income securities:
Tax-exempt		$	(29)	$	76	$	(23)	$	(4)	$	(12)	$	27	$	9	$	(28)	$	20	$	(4)
Taxable		(11)		25		6		(43)		(40)		-		(3)		(7)		(23)		(50)
Equity securities		10		68		25		14		336		(22)		26		(138)		117		202
Limited partnership interests		44		(13)		15		(7)		19		11		(30)		(164)		39		(164)
Derivatives and other		68		(263)		(129)		(150)		(68)		(306)		199		23		(474)		(152)
Total		$	82	$	(107)	$	(106)	$	(190)	$	235	$	(290)	$	201	$	(314)	$	(321)	$	(168)
REALIZED CAPITAL GAINS AND LOSSES (PRE-TAX) BY TRANSACTION TYPE
Impairment write-downs		$	(63)	$	(57)	$	(96)	$	(79)	$	(91)	$	(100)	$	(87)	$	(256)	$	(295)	$	(534)
Change in intent write-downs (5)		(33)		(10)		(10)		(9)		(6)		(10)		(1)		(72)		(62)		(89)
Net other-than-temporary impairment losses recognized in earnings		(96)		(67)		(106)		(88)		(97)		(110)		(88)		(328)		(357)		(623)
Sales (5)		65		228		121		41		377		91		93		50		455		611
Valuation of derivative instruments		47		(143)		(134)		(101)		53		(209)		188		20		(331)		52
Settlements of derivative instruments		21		(118)		3		(49)		(121)		(99)		11		6		(143)		(203)
EMA limited partnership income		45		(7)		10		7		23		37		(3)		(62)		55		(5)
Total		$	82	$	(107)	$	(106)	$	(190)	$	235	$	(290)	$	201	$	(314)	$	(321)	$	(168)
AVERAGE INVESTED ASSETS (in billions) (6)		$	34.7	$	34.9	$	34.8	$	34.6	$	34.9	$	34.9	$	33.8	$	32.9	$	34.7	$	34.0

(1) At December 31, 2010, Property-Liability has commitments to invest in additional limited partnership interests totaling $740 million.

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

(3) To conform to the current period presentation, prior periods have been reclassified.

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

(5) Includes $1 million and $9 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 twelve months ended December 31, 2010, respectively.

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

44

THE ALLSTATE CORPORATION

ALLSTATE FINANCIAL

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

($ in millions)

	Three months ended																	Twelve months ended
		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Dec. 31,
		2010		2010		2010		2010		2009		2009		2009		2009		2010		2009
NET INVESTMENT INCOME
Fixed income securities		$	614	$	631	$	646	$	652	$	657	$	654	$	658	$	699	$	2,543	$	2,668
Equity securities		2		1		2		1		1		2		1		1		6		5
Mortgage loans		89		92		99		103		109		119		130		136		383		494
Cost limited partnership interests (1)		11		3		4		3		2		2		2		2		21		8
Short-term		—		1		—		1		1		2		2		7		2		12
Other		5		3		—		(2)		(4)		(7)		(4)		(1)		6		(16)
Sub-total		721		731		751		758		766		772		789		844		2,961		3,171
Less: Investment expense		(29)		(24)		(28)		(27)		(29)		(28)		(25)		(25)		(108)		(107)
Net investment income		$	692	$	707	$	723	$	731	$	737	$	744	$	764	$	819	$	2,853	$	3,064
Net investment income, after-tax		$	453	$	463	$	473	$	478	$	480	$	489	$	500	$	535	$	1,867	$	2,004
PRE-TAX YIELDS (2)
Fixed income securities		5.0		5.0		5.1		5.1		5.2		5.2		5.3		5.6		5.0		5.3
Equity securities		3.6		2.8		3.5		2.3		3.7		3.1		4.8		2.9		3.1		3.6
Mortgage loans		5.3		5.2		5.4		5.3		5.2		5.3		5.5		5.5		5.3		5.4
Cost limited partnership interests (3)		7.0		1.8		3.3		1.9		1.9		1.3		1.5		1.7		3.6		1.6
Total portfolio (3)(4)		4.8		4.8		4.8		4.8		4.8		4.8		4.8		5.0		4.8		4.8
REALIZED CAPITAL GAINS AND LOSSES (PRE-TAX) BY ASSET TYPE
Fixed income securities		$	(85)	$	(19)	$	(177)	$	(92)	$	(342)	$	(64)	$	2	$	140	$	(373)	$	(264)
Equity securities		1		15		20		—		2		1		1		(25)		36		(21)
Mortgage loans		(17)		(1)		(28)		(25)		(30)		(66)		(16)		(32)		(71)		(144)
Limited partnership interests		28		(6)		9		(15)		(26)		(32)		(53)		(171)		16		(282)
Derivatives and other		109		(27)		(177)		(30)		121		(73)		187		45		(125)		280
Total		$	36	$	(38)	$	(353)	$	(162)	$	(275)	$	(234)	$	121	$	(43)	$	(517)	$	(431)
REALIZED CAPITAL GAINS AND LOSSES (PRE-TAX) BY TRANSACTION TYPE
Impairment write-downs		$	(134)	$	(80)	$	(143)	$	(144)	$	(179)	$	(281)	$	(204)	$	(357)	$	(501)	$	(1,021)
Change in intent write-downs		(42)		(20)		(57)		(23)		(209)		(1)		(25)		(33)		(142)		(268)
Net other-than-temporary impairment losses recognized in earnings		(176)		(100)		(200)		(167)		(388)		(282)		(229)		(390)		(643)		(1,289)
Sales		68		89		18		44		10		106		163		359		219		638
Valuation of derivative instruments		99		10		(149)		(54)		113		(60)		179		83		(94)		315
Settlements of derivative instruments		14		(34)		(30)		19		11		7		41		(18)		(31)		41
EMA limited partnership income		31		(3)		8		(4)		(21)		(5)		(33)		(77)		32		(136)
Total		$	36	$	(38)	$	(353)	$	(162)	$	(275)	$	(234)	$	121	$	(43)	$	(517)	$	(431)

AVERAGE INVESTED ASSETS (in billions) (5) $ 61.0 $ 61.4 $ 62.5 $ 63.9 $ 64.5 $ 65.2 $ 66.4 $ 67.7 $ 62.3 $ 66.0

(1)	At December 31, 2010, Allstate Financial has commitments to invest in additional limited partnership interests totaling $731 million.
(2)	Pre-tax yields are calculated as annualized investment income (including dividend income in the case of equity securities) divided by the average of investment balances at the end of each quarter during the year.  Investment balances, for purposes of the pre-tax yield calculation, exclude unrealized capital gains and losses.
(3)	To conform to the current period presentation, prior periods have been reclassified.
(4)	The pre-tax yield for the total portfolio reflects the yield on total investments.  Total investments include fixed income and equity securities, mortgage loans, cost limited partnership interests, short-term and other investments.
(5)	Average invested assets for the quarter are calculated as the average of the current and prior quarter invested assets. Year-to-date average invested assets are calculated as the average of invested assets at the end of each quarter during the year.  For purposes of the average invested assets calculation, unrealized capital gains and losses are excluded.

45

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 operatio ns 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 busin ess.  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 perform ance.  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 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 unrealize d 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 byprodu ct 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 sharehold ers' 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 bec ause 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.

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