8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15 (d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported) August 1, 2011

The Allstate Corporation

(Exact name of registrant as specified in charter)

Delaware	1-11840	36-3871531
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer 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 August 1, 2011, the registrant issued a press release announcing its financial results for the second quarter of 2011, and the availability of the registrant’s second quarter investor supplement on the registrant’s web site.  The press release and the investor supplement are furnished as Exhibits 99.1 and 99.2 to this report.  The information contained in the press release and the investor supplement are furnished and not filed pursuant to instruction B.2 of Form 8-K.

Section 9. – Financial Statements and Exhibits

Item 9.01.             Financial Statements and Exhibits.

(d)  Exhibits

99.1	Registrant’s press release dated August 1, 2011
99.2	Second quarter 2011 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: Senior Group Vice President and Controller
Dated: August 1, 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 Second Quarter Results Impacted By Record Severe Weather;

Progress on Key Strategies Continues as Underlying Profitability Improves

NORTHBROOK, Ill., August 1, 2011 – The Allstate Corporation (NYSE: ALL) today reported financial results for the second quarter of 2011:

	The Allstate Corporation Consolidated Highlights
		Three months ended June 30,
	($ in millions, except per share amounts and ratios)	2011	2010	% Change
	Consolidated revenues	$ 8,081	$ 7,656	5.6
	Net (loss) income	(620)	145	NM
	Net (loss) income per diluted share	(1.19)	0.27	NM
	Operating (loss) income*	(642)	441	NM
	Operating (loss) income per diluted share*	(1.23)	0.81	NM
	Book value per share	35.95	33.24	8.2
	Book value per share, excluding the impact of unrealized net capital gains and losses on fixed income securities*	33.91	32.51	4.3
	Catastrophe losses	2,339	636	267.8
	Property-Liability combined ratio	123.3	96.8	26.5 pts
	Property-Liability combined ratio excluding the effect of catastrophes and prior year reserve reestimates (“underlying combined ratio”)*	87.5	88.1	(0.6) pts
NM = not meaningful * 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.

While underlying profitability improved across the company’s business lines this quarter, those gains were more than offset by $2.3 billion in record second quarter catastrophe losses.

“Our key profitability benchmark continued to improve,” said Thomas J. Wilson, chairman, president and chief executive officer of The Allstate Corporation, noting that the company’s underlying Property-Liability combined ratio stood at 88.7 for the first six months of 2011, well within Allstate’s full-year guidance range of 88 to 91.  “We also advanced our strategy of broadening our profitable protection relationships by offering differentiated products tailored to the needs of specific customer segments.”  However, as anticipated, profit improvement actions in New York and Florida continued to impact growth in auto policies.  Allstate Protection’s policies in force declined slightly when compared to the prior year quarter, as a 0.6% reduction in Allstate brand standard auto and a 3.9% reduction in homeowners were only partially offset by increases in specialty lines and Canada.

“We made substantial progress improving returns at Allstate Financial,” said Wilson.  Allstate Financial second quarter operating income grew 12.8% versus the same period a year ago. Proactive management of the consolidated investment portfolio was also reflected in total portfolio returns, which benefitted from increased investment yields, realized capital gains, and a $2.1 billion increase in pre-tax net unrealized capital gains from June 30, 2010.

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“We will continue to make progress on our commitment to shareholders to improve overall returns.  I’m confident the actions we took during the quarter, including our pending acquisition of Esurance and Answer Financial, position us well for our longer-term focus of delivering unique value propositions to each customer segment and improving shareholder value,” Wilson said.

Property-Liability Impacted by Record Second Quarter Catastrophe Losses, Underlying Profitability Improved

Allstate’s combined ratio for the second quarter of 2011 was 123.3, reflecting the previously reported catastrophe losses of $2.3 billion, or 36.2 points.  During the period, Allstate experienced 33 catastrophe loss events including five tornadoes, three wildfires and 25 wind/hailstorms.  Excluding catastrophe losses and prior year reserve reestimates, the Property-Liability underlying combined ratio was 87.5 during the second quarter of 2011 compared to 88.1 in the second quarter of 2010, reflecting lower claims frequency.

Allstate brand standard auto policies continued to decline during the second quarter of 2011, consistent with the company’s expectation, as growth was balanced with a focus on maintaining auto profitability.  Premiums written* declined 0.9% for the second quarter of 2011 compared to the prior year second quarter, reflecting declining policies in force and lower average premiums.  Policies in force declined by 0.6% compared to the second quarter of 2010, as the level of new policies issued was not sufficient to make up for policies not renewed.  New issued applications declined 5.2% in the quarter when compared to the prior year quarter, while retention improved to 89.2 from 89.0 in the second quarter of last year.  Average gross premium decreased 0.5% in the second quarter of 2011 when compared to the second quarter of 2010, in part due to customers electing lower coverage options.  Allstate brand standard auto combined ratio was 98.2, 3.7 points higher than the second quarter of 2010 due to a 4.7 point increase in the impact of catastrophe losses.  Allstate brand standard auto underlying combined ratio was 93.6 in the second quarter of 2011, compared to 94.1 in the second quarter of 2010.

Allstate brand homeowners premiums written increased 2.6% in the second quarter of 2011 compared to the same period a year ago, as a 6.0% increase in average gross premium was partly offset by a 3.9% decline in policies in force.  Rate increases averaging 6.0% were approved in 18 states during the second quarter, as Allstate continued to take actions to improve homeowners returns.  Catastrophe losses impacted the Allstate brand homeowners combined ratio by 123.2 points in the second quarter of 2011.  Excluding the impact of catastrophes and prior year reserve reestimates, the Allstate brand homeowners underlying combined ratio was 69.5 in the second quarter of 2011, compared to 69.8 in the second quarter of 2010.

Allstate Financial Improves Financial Performance

Allstate Financial made progress on its commitment to improve returns.  By executing a strategy of reducing concentration in and improving the profitability of investment spread products, expanding Allstate Benefits and focusing on Allstate’s core markets, operating income increased in the second quarter when compared to the second quarter of 2010.  Premiums and contract charges were in line with 2010 second quarter levels as growth in underwritten products offset a decline in annuities.

Allstate Financial operating income was $141 million in the second quarter of 2011 compared to $125 million in the prior year second quarter, due to increases in both benefit and investment spread.  The benefit spread increased to $161 million in the second quarter from $99 million in the 2010 second quarter due primarily to unfavorable reserve reestimates of $42 million recorded in 2010, as well as higher profitability and growth in Allstate Benefits’ accident and health insurance business.  The investment spread increased 6.0% to $142 million in the second quarter when compared to the prior year quarter, as actions to improve investment portfolio yields and lower crediting rates on annuities and interest sensitive-life insurance more than offset the effect of a continued decline in spread-based business in force. As a result, operating income return on attributed equity* totaled 7.5% for the twelve months ended June 30, 2011.

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Net income improved to $166 million in the second quarter of 2011 compared to a net loss of $107 million in the second quarter of 2010.  The improvement was due to net realized capital gains in the second quarter versus net realized capital losses in the second quarter of last year, and increased operating income.

Increasing Portfolio Yields Drive Strong Investment Results

Allstate maintained portfolio yields through proactive management of risk and return. The total portfolio yield was 4.5% during the second quarter of 2011, higher than both the prior quarter and prior year quarter.

Net investment income was $1.02 billion for the second quarter of 2011, a 2.8% decline from the second quarter of 2010, but a 3.9% increase compared to the first quarter of 2011.  Lower portfolio balances drove the changes from the prior year quarter.  Overall portfolio yields increased in the second quarter of 2011 when compared to both the second quarter of 2010 and first quarter of 2011, related to yield enhancement actions on fixed income securities, seasonal foreign equity dividends, and limited partnership distributions.

Net realized capital gains for the second quarter of 2011 were $57 million, pre-tax, compared to a net realized capital loss of $451 million, pre-tax, in the second quarter of 2010, primarily due to reduced derivative losses, lower impairment write-downs, and increased valuation gains on limited partnerships.

Allstate’s consolidated investment portfolio totaled $99.3 billion at June 30, 2011 compared to $100.5 billion at December 31, 2010, as expected reductions in the Allstate Financial portfolio more than offset strong investment returns.  The net unrealized capital gains totaled $2.5 billion, pre-tax, at June 30, 2011 compared to $1.4 billion at December 31, 2010.

Strong Capital Position, Repurchases Totaled $232 Million

“Our capital position continues to be strong after significant catastrophe losses and our share repurchase program,” said Don Civgin, executive vice president and chief financial officer.

Statutory surplus at June 30, 2011 was an estimated $15.0 billion for Allstate Insurance Company, including $3.5 billion at Allstate Life Insurance Company.  This compares to Allstate Insurance Company statutory surplus of $15.9 billion at March 31, 2011 and $15.4 billion at December 31, 2010.  During the second quarter of 2011, Allstate Insurance Company made a $238 million dividend to the holding company.  Deployable assets at the holding company level totaled $3.5 billion at June 30, 2011 compared to $3.7 billion at March 31, 2011 and $3.8 billion at December 31, 2010.

“The impact of this quarter’s catastrophe losses on book value per share was mostly offset by an improved unrealized position,” Civgin said.  Book value per share totaled $35.95 at June 30, 2011, compared to $36.51 at March 31, 2011 and $33.24 at June 30, 2010.  During the second quarter of 2011, Allstate repurchased shares totaling $232 million.  At June 30, 2011, $308 million remained on the $1 billion share repurchase program.

*     *     *     *     *

Visit www.allstateinvestors.com to view additional information about Allstate’s 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 Monday, August 1.

The Allstate Corporation (NYSE: ALL) is the nation’s largest publicly held personal lines insurer known for its “You’re In Good Hands With Allstate®” slogan.  Now celebrating its 80th anniversary as an insurer, 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®.

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THE ALLSTATE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

($ in millions, except per share data)		Three months ended June 30,				Six months ended June 30,
		2011		2010		2011		2010
		(unaudited)				(unaudited)
Revenues
Property-liability insurance premiums	$	6,457	$	6,513	$	12,905	$	13,016
Life and annuity premiums and contract charges		547		545		1,116		1,089
Net investment income		1,020		1,049		2,002		2,099
Realized capital gains and losses:
Total other-than-temporary impairment losses		(82)		(288)		(238)		(538)
Portion of loss recognized in other comprehensive income		(4)		(18)		(31)		(23)
Net other-than-temporary impairment losses recognized in earnings		(86)		(306)		(269)		(561)
Sales and other realized capital gains and losses		143		(145)		422		(238)
Total realized capital gains and losses		57		(451)		153		(799)
		8,081		7,656		16,176		15,405
Costs and expenses
Property-liability insurance claims and claims expense		6,355		4,714		10,831		9,506
Life and annuity contract benefits		422		485		876		927
Interest credited to contractholder funds		417		450		835		913
Amortization of deferred policy acquisition costs		1,018		949		2,069		1,963
Operating costs and expenses		802		789		1,640		1,618
Restructuring and related charges		11		13		20		24
Interest expense		91		92		183		184
		9,116		7,492		16,454		15,135
Gain (loss) on disposition of operations		6		2		(17)		3
(Loss) income from operations before income tax (benefit) expense		(1,029)		166		(295)		273
Income tax (benefit) expense		(409)		21		(194)		8
Net (loss) income	$	(620)	$	145	$	(101)	$	265
Earnings per share:
Net (loss) income per share - Basic	$	(1.19)	$	0.27	$	(0.19)	$	0.49
Weighted average shares - Basic		523.1		540.7		528.2		540.4
Net (loss) income per share - Diluted	$	(1.19)	$	0.27	$	(0.19)	$	0.49
Weighted average shares - Diluted		523.1		543.0		528.2		542.4
Cash dividends declared per share	$	0.21	$	0.20	$	0.42	$	0.40

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THE ALLSTATE CORPORATION

SEGMENT RESULTS

($ in millions, except ratios)		Three months ended				Six months ended
		June 30,				June 30,
		2011		2010		2011		2010
Property-Liability
Premiums written	$	6,611	$	6,640	$	12,826	$	12,898
Premiums earned	$	6,457	$	6,513	$	12,905	$	13,016
Claims and claims expense		(6,355)		(4,714)		(10,831)		(9,506)
Amortization of deferred policy acquisition costs		(908)		(914)		(1,812)		(1,839)
Operating costs and expenses		(685)		(664)		(1,415)		(1,368)
Restructuring and related charges		(11)		(14)		(22)		(25)
Underwriting (loss) income		(1,502)		207		(1,175)		278
Net investment income		310		310		594		614
Periodic settlements and accruals on non-hedge derivative instruments		(3)		(1)		(7)		(2)
Income tax benefit (expense) on operations		462		(148)		282		(236)
Operating (loss) income		(733)		368		(306)		654
Realized capital gains and losses, after-tax		(6)		(69)		32		(192)
Reclassification of periodic settlements and accruals on non-hedge
derivative instruments, after-tax		1		--		4		1
Net (loss) income	$	(738)	$	299	$	(270)	$	463
Catastrophe losses	$	2,339	$	636	$	2,672	$	1,284
Operating ratios:
Claims and claims expense ratio		98.4		72.4		83.9		73.1
Expense ratio		24.9		24.4		25.2		24.8
Combined ratio		123.3		96.8		109.1		97.9
Effect of catastrophe losses on combined ratio		36.2		9.8		20.7		9.9
Effect of prior year reserve reestimates on combined ratio		(0.7)		(2.3)		(0.7)		(1.3)
Effect of catastrophe losses included in prior year reserve reestimates on
combined ratio		(0.3)		(1.2)		(0.4)		(0.7)
Effect of Discontinued Lines and Coverages on combined ratio		0.1		--		0.1		0.1
Allstate Financial
Investments	$	59,659	$	61,804	$	59,659	$	61,804
Premiums and contract charges	$	547	$	545	$	1,116	$	1,089
Net investment income		694		723		1,378		1,454
Periodic settlements and accruals on non-hedge derivative instruments		19		11		36		28
Contract benefits		(422)		(485)		(876)		(927)
Interest credited to contractholder funds		(412)		(450)		(837)		(913)
Amortization of deferred policy acquisition costs		(103)		(41)		(216)		(99)
Operating costs and expenses		(110)		(116)		(219)		(236)
Restructuring and related charges		--		1		2		1
Income tax expense on operations		(72)		(63)		(127)		(133)
Operating income		141		125		257		264
Realized capital gains and losses, after-tax		40		(230)		65		(335)
Valuation changes on embedded derivatives that are not hedged, after-tax		(3)		--		5		--
DAC and DSI (amortization) accretion relating to realized capital gains and
losses and valuation changes on embedded derivatives that are not
hedged, after-tax		(5)		4		(31)		2
DAC and DSI unlocking relating to realized capital gains and losses, after-tax		--		--		1		(18)
Reclassification of periodic settlements and accruals on non-hedge
derivative instruments, after-tax		(11)		(7)		(23)		(18)
Gain (loss) on disposition of operations, after-tax		4		1		(11)		2
Net income (loss)	$	166	$	(107)	$	263	$	(103)
Corporate and Other
Net investment income	$	16	$	16	$	30	$	31
Operating costs and expenses		(98)		(101)		(189)		(198)
Income tax benefit on operations		32		33		63		65
Operating loss		(50)		(52)		(96)		(102)
Realized capital gains and losses, after-tax		2		5		2		7
Net loss	$	(48)	$	(47)	$	(94)	$	(95)
Consolidated net (loss) income	$	(620)	$	145	$	(101)	$	265

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THE ALLSTATE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

($ in millions, except par value data)		June 30,		December 31,
		2011		2010
Assets		(unaudited)
Investments:
Fixed income securities, at fair value (amortized cost $76,502 and $78,786)	$	78,414	$	79,612
Equity securities, at fair value (cost $4,329 and $4,228)		4,954		4,811
Mortgage loans		6,827		6,679
Limited partnership interests		4,400		3,816
Short-term, at fair value (amortized cost $2,536 and $3,279)		2,536		3,279
Other		2,158		2,286
Total investments		99,289		100,483
Cash		693		562
Premium installment receivables, net		4,869		4,839
Deferred policy acquisition costs		4,572		4,769
Reinsurance recoverables, net		6,446		6,552
Accrued investment income		875		809
Deferred income taxes		525		784
Property and equipment, net		914		921
Goodwill		874		874
Other assets		1,791		1,605
Separate Accounts		8,175		8,676
Total assets	$	129,023	$	130,874
Liabilities
Reserve for property-liability insurance claims and claims expense	$	20,456	$	19,468
Reserve for life-contingent contract benefits		13,787		13,482
Contractholder funds		45,078		48,195
Unearned premiums		9,727		9,800
Claim payments outstanding		948		737
Other liabilities and accrued expenses		6,152		5,564
Long-term debt		5,907		5,908
Separate Accounts		8,175		8,676
Total liabilities		110,230		111,830
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, 517 million and 533 million shares outstanding		9		9
Additional capital paid-in		3,165		3,176
Retained income		31,647		31,969
Deferred ESOP expense		(43)		(44	)
Treasury stock, at cost (383 million and 367 million shares)		(16,387)		(15,910	)
Accumulated other comprehensive income:
Unrealized net capital gains and losses:
Unrealized net capital losses on fixed income securities with OTTI		(156)		(190	)
Other unrealized net capital gains and losses		1,783		1,089
Unrealized adjustment to DAC, DSI and insurance reserves		(181)		36
Total unrealized net capital gains and losses		1,446		935
Unrealized foreign currency translation adjustments		83		69
Unrecognized pension and other postretirement benefit cost		(1,156)		(1,188	)
Total accumulated other comprehensive income (loss)		373		(184	)
Total shareholders’ equity		18,764		19,016
Noncontrolling interest		29		28
Total equity		18,793		19,044
Total liabilities and equity	$	129,023	$	130,874

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THE ALLSTATE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

($ in millions)		Six months ended June 30,
		2011			2010
Cash flows from operating activities		(unaudited)
Net (loss) income	$	(101	)	$	265
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation, amortization and other non-cash items		89			26
Realized capital gains and losses		(153	)		799
Loss (gain) on disposition of operations		17			(3	)
Interest credited to contractholder funds		835			913
Changes in:
Policy benefits and other insurance reserves		665			306
Unearned premiums		(87	)		(135	)
Deferred policy acquisition costs		57			(70	)
Premium installment receivables, net		(22	)		9
Reinsurance recoverables, net		(40	)		(206	)
Income taxes		(226	)		74
Other operating assets and liabilities		226			116
Net cash provided by operating activities		1,260			2,094
Cash flows from investing activities
Proceeds from sales
Fixed income securities		14,140			9,114
Equity securities		854			3,046
Limited partnership interests		335			278
Mortgage loans		65			44
Other investments		109			62
Investment collections
Fixed income securities		2,385			2,391
Mortgage loans		308			638
Other investments		92			44
Investment purchases
Fixed income securities		(13,934	)		(11,900	)
Equity securities		(781	)		(1,501	)
Limited partnership interests		(765	)		(616	)
Mortgage loans		(536	)		(10	)
Other investments		(146	)		(79	)
Change in short-term investments, net		1,166			439
Change in other investments, net		(170	)		(128	)
Purchases of property and equipment, net		(106	)		(69	)
Disposition of operations		(1	)		–
Net cash provided by investing activities		3,015			1,753
Cash flows from financing activities
Repayment of long-term debt		(1	)		(1	)
Contractholder fund deposits		1,120			1,567
Contractholder fund withdrawals		(4,508	)		(5,112	)
Dividends paid		(218	)		(215	)
Treasury stock purchases		(544	)		(5	)
Shares reissued under equity incentive plans, net		17			25
Excess tax benefits on share-based payment arrangements		(3	)		(4	)
Other		(7	)		(3	)
Net cash used in financing activities		(4,144	)		(3,748	)
Net increase in cash		131			99
Cash at beginning of period		562			612
Cash at end of period	$	693		$	711

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Definitions of Non-GAAP and Operating Measures

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

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

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

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

·amortization of DAC and DSI, to the extent they resulted from the recognition of certain realized capital gains and losses or valuation changes on embedded derivatives that are not hedged,

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

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

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

We use operating income (loss) as an important measure to evaluate our results of operations.  We believe that the measure provides investors with a valuable measure of the company’s ongoing performance because it reveals trends in our insurance and financial services business that may be obscured by the net effect of realized capital gains and losses, valuation changes on embedded derivatives that are not hedged, gain (loss) on disposition of operations and adjustments for other significant non-recurring, infrequent or unusual items.  Realized capital gains and losses, valuation changes on embedded derivatives that are not hedged and gain (loss) on disposition of operations may vary significantly between periods and are generally driven by business decisions and external economic developments such as capital market conditions, the timing of which is unrelated to the insurance underwriting process.  Consistent with our intent to protect results or earn additional income, operating income (loss) includes periodic settlements and accruals on certain derivative instruments that are reported in realized capital gains and losses because they do not qualify for hedge accounting or are not designated as hedges for accounting purposes.  These instruments are used for economic hedges and to replicate fixed income securities, and by including them in operating income (loss), we are appropriately reflecting their trends in our performance and in a manner consistent with the economically hedged investments, product attributes (e.g., net investment income and interest credited to contractholder funds) or replicated investments.  Non-recurring items are excluded because, by their nature, they are not indicative of our business or economic trends.  Accordingly, operating income (loss) excludes the effect of items that tend to be highly variable from period to period and highlights the results from ongoing operations and the underlying profitability of our business.  A byproduct of excluding these items to determine operating income 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 (loss) income and net (loss) income.

($ in millions, except per share data)		For the three months ended June 30,
		Property-Liability						Allstate Financial						Consolidated					Per diluted share
		2011			2010			2011			2010			2011			2010		2011		2010
Operating (loss) income	$	(733	)	$	368		$	141		$	125		$	(642	)	$	441	$	(1.23)	$	0.81
Realized capital gains and losses		(8	)		(106	)		62			(353	)		57			(451)
Income tax benefit (expense)		2			37			(22	)		123			(21	)		157
Realized capital gains and losses, after-tax		(6	)		(69	)		40			(230	)		36			(294)		0.07		(0.53	)
Valuation changes on embedded derivatives that are not hedged, after-tax		--			--			(3	)		--			(3	)		--		(0.01)		--
DAC and DSI (amortization) accretion relating to realized capital gains and losses and valuation changes on embedded derivatives that are not hedged, after-tax		--			--			(5	)		4			(5	)		4		(0.01)		--
Reclassification of periodic settlements and accruals on non-hedge derivative instruments, after-tax		1			--			(11	)		(7	)		(10	)		(7)		(0.02)		(0.01	)
Gain on disposition of operations, after-tax		--			--			4			1			4			1		0.01		--
Net (loss) income	$	(738	)	$	299		$	166		$	(107	)	$	(620	)	$	145	$	(1.19)	$	0.27

8

($ in millions, except per share data)		For the six months ended June 30,
		Property-Liability						Allstate Financial						Consolidated						Per diluted share
		2011			2010			2011			2010			2011			2010			2011			2010
Operating (loss) income	$	(306	)	$	654		$	257		$	264		$	(145	)	$	816		$	(0.27	)	$	1.50
Realized capital gains and losses		49			(296	)		101			(515	)		153			(799	)
Income tax (expense) benefit		(17	)		104			(36	)		180			(54	)		279
Realized capital gains and losses, after-tax		32			(192	)		65			(335	)		99			(520	)		0.19			(0.95	)
Valuation changes on embedded derivatives that are not hedged, after-tax		--			--			5			--			5			--			0.01			--
DAC and DSI (amortization) accretion relating to realized capital gains and losses and valuation changes on embedded derivatives that are not hedged, after-tax		--			--			(31	)		2			(31	)		2			(0.06	)		--
DAC and DSI unlocking relating to realized capital gains and losses, after-tax		--			--			1			(18	)		1			(18	)		--			(0.03	)
Reclassification of periodic settlements and accruals on non-hedge derivative instruments, after-tax		4			1			(23	)		(18	)		(19	)		(17	)		(0.04	)		(0.03	)
(Loss) gain on disposition of operations, after-tax		--			--			(11	)		2			(11	)		2			(0.02	)		--
Net (loss) income	$	(270	)	$	463		$	263		$	(103	)	$	(101	)	$	265		$	(0.19	)	$	0.49

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

Combined ratio excluding the effect of catastrophes and prior year reserve reestimates (“underlying combined ratio”) is a non-GAAP ratio, which is computed as the difference between three GAAP operating ratios: the combined ratio, the effect of catastrophes on the combined ratio and the effect of prior year non-catastrophe reserve reestimates on the combined ratio.  The most directly comparable GAAP measure is the combined ratio.  We believe that this ratio is useful to investors and it is used by management to reveal the trends in our Property-Liability business that may be obscured by catastrophe losses and prior year reserve reestimates.  These catastrophe losses cause our loss trends to vary significantly between periods as a result of their incidence of occurrence and magnitude, and can have a significant impact on the combined ratio.  Prior year reserve reestimates are caused by unexpected loss development on historical reserves.  We believe it is useful for investors to evaluate these components separately and in the aggregate when reviewing our underwriting performance.  We also provide it to facilitate a comparison to our outlook on the 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 Property-Liability combined ratio excluding the effect of catastrophes and prior year reserve reestimates to the Property-Liability combined ratio is provided in the following table.

	Three months ended June 30,				Six months ended June 30,
	2011		2010		2011		2010
Combined ratio excluding the effect of catastrophes and prior year reserve reestimates (“underlying combined ratio”)	87.5		88.1		88.7		88.6
Effect of catastrophe losses	36.2		9.8		20.7		9.9
Effect of prior year non-catastrophe reserve reestimates	(0.4	)	(1.1	)	(0.3	)	(0.6	)
Combined ratio	123.3		96.8		109.1		97.9
Effect of prior year catastrophe reserve reestimates	(0.3	)	(1.2	)	(0.4	)	(0.7	)

In this news release, we provide our outlook range on the Property-Liability 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.

9

A reconciliation of the Allstate brand standard auto combined ratio excluding the effect of catastrophes and prior year reserve reestimates to the Allstate brand standard auto combined ratio is provided in the following table.

	Three months ended June 30,		Six months ended June 30,
	2011	2010	2011	2010
Combined ratio excluding the effect of catastrophes and prior year reserve reestimates (“underlying combined ratio”)	93.6	94.1	94.2	93.8
Effect of catastrophe losses	6.7	2.0	3.6	1.3
Effect of prior year non-catastrophe reserve reestimates	(2.1)	(1.6)	(1.2)	(0.6)
Combined ratio	98.2	94.5	96.6	94.5
Effect of prior year catastrophe reserve reestimates	(0.1)	(0.3)	(0.1)	(0.4)

A reconciliation of the Allstate brand homeowners combined ratio excluding the effect of catastrophes and prior year reserve reestimates to the Allstate brand homeowners combined ratio is provided in the following table.

	Three months ended June 30,		Six months ended June 30,
	2011	2010	2011	2010
Combined ratio excluding the effect of catastrophes and prior year reserve reestimates (“underlying combined ratio”)	69.5	69.8	71.7	72.2
Effect of catastrophe losses	123.2	34.7	70.6	35.9
Effect of prior year non-catastrophe reserve reestimates	0.7	(0.1)	0.3	(0.3)
Combined ratio	193.4	104.4	142.6	107.8
Effect of prior year catastrophe reserve reestimates	(0.4)	(4.1)	(1.5)	(2.0)

Operating income (loss) return on shareholders’ equity is a ratio that uses a non-GAAP measure.  It is calculated by dividing the rolling 12-month operating income (loss) 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 (loss) as the numerator for the same reasons we use operating income (loss), as discussed above.  We use average shareholders’ equity excluding the effect of unrealized net capital gains and losses for the denominator as a representation of shareholders’ equity primarily attributable to the company’s earned and realized business operations because it eliminates the effect of items that are unrealized and vary significantly between periods due to external economic developments such as capital market conditions like changes in equity prices and interest rates, the amount and timing of which are unrelated to the insurance underwriting process.  We use it to supplement our evaluation of net income (loss) 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 (loss) return on shareholders’ equity because it eliminates the after-tax effects of realized and unrealized net capital gains and losses that can fluctuate significantly from period to period and that are driven by economic developments, the magnitude and timing of which are generally not influenced by management.  In addition, it eliminates non-recurring items that are not indicative of our ongoing business or economic trends.  A byproduct of excluding the items noted above to determine operating income (loss) 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 (loss) 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 (loss) 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 (loss) return on shareholders’ equity should not be considered as a substitute for return on shareholders’ equity and does not reflect the overall profitability of our business.

The following table reconciles return on shareholders’ equity and operating income return on shareholders’ equity.

($ in millions)		For the twelve months ended June 30,
		2011		2010
Return on shareholders’ equity
Numerator:
Net income	$	562	$	1,004
Denominator:
Beginning shareholders’ equity	$	18,039	$	15,068
Ending shareholders’ equity		18,764		18,039
Average shareholders’ equity	$	18,402	$	16,554
Return on shareholders’ equity		3.1%		6.1%

10

		For the twelve months ended June 30,
		2011		2010
Operating income return on shareholders’ equity
Numerator:
Operating income	$	578	$	1,946
Denominator:
Beginning shareholders’ equity	$	18,039	$	15,068
Unrealized net capital gains and losses		328		(2,112)
Adjusted beginning shareholders’ equity		17,711		17,180
Ending shareholders’ equity		18,764		18,039
Unrealized net capital gains and losses		1,446		328
Adjusted ending shareholders’ equity		17,318		17,711
Average adjusted shareholders’ equity	$	17,515	$	17,446
Operating income return on shareholders’ equity		3.3%		11.2%

The following tables reconcile Allstate Financial segment return on attributed equity and operating income return on attributed equity, including a reconciliation of Allstate Financial segment attributed equity to The Allstate Corporation shareholders’ equity.

($ in millions)		For the twelve months ended June 30,
		2011		2010
Allstate Financial segment return on attributed equity(1)
Numerator:
Net income (loss)	$	424	$	(278)
Denominator:
Beginning attributed equity	$	6,280	$	4,809
Ending attributed equity (2)		7,214		6,280
Average attributed equity	$	6,747	$	5,545
Return on attributed equity		6.3%		(5.0)%

		For the twelve months ended June 30,
		2011		2010
Allstate Financial segment operating income return on attributed equity
Numerator:
Operating income	$	469	$	454
Denominator:
Beginning attributed equity	$	6,280	$	4,809
Unrealized net capital gains and losses		199		(1,155)
Adjusted beginning attributed equity		6,081		5,964
Ending attributed equity		7,214		6,280
Unrealized net capital gains and losses		764		199
Adjusted ending attributed equity		6,450		6,081
Average adjusted attributed equity	$	6,266	$	6,023
Operating income return on attributed equity		7.5%		7.5%

11

Reconciliation of beginning and ending Allstate Financial segment attributed equity and The Allstate Corporation beginning and ending shareholders’ equity		For the twelve months ended June 30,
		2011		2010
Beginning Allstate Financial segment attributed equity	$	6,280	$	4,809
Beginning all other equity		11,759		10,259
Beginning Allstate Corporation shareholders’ equity	$	18,039	$	15,068
Ending Allstate Financial segment attributed equity	$	7,214	$	6,280
Ending all other equity		11,550		11,759
Ending Allstate Corporation shareholders’ equity	$	18,764	$	18,039

(1)	Allstate Financial attributed equity is the sum of equity for Allstate Life Insurance Company, the applicable equity for American Heritage Life Investment Corporation, and the equity for Allstate Bank, excluding the most recently available capital in excess of management requirements.
(2)	As of June 30, 2011, the amount excluded from the attributed equity balance for capital in excess of management requirements is zero.

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

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

($ in millions, except per share data)		As of June 30,
		2011		2010
Book value per share
Numerator:
Shareholders’ equity	$	18,764	$	18,039
Denominator:
Shares outstanding and dilutive potential shares outstanding		522.0		542.7
Book value per share	$	35.95	$	33.24
Book value per share, excluding the impact of unrealized net capital gains and losses on fixed income securities
Numerator:
Shareholders’ equity	$	18,764	$	18,039
Unrealized net capital gains and losses on fixed income securities		1,062		398
Adjusted shareholders’ equity	$	17,702	$	17,641
Denominator:
Shares outstanding and dilutive potential shares outstanding		522.0		542.7
Book value per share, excluding the impact of unrealized net capital gains and losses on fixed income securities	$	33.91	$	32.51

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

($ in millions)		Three months ended June 30,						Six months ended June 30,
		2011			2010			2011		2010
Property-Liability premiums written	$	6,611		$	6,640		$	12,826	$	12,898
(Increase) decrease in unearned premiums		(165	)		(110	)		69		135
Other		11			(17	)		10		(17	)
Property-Liability premiums earned	$	6,457		$	6,513		$	12,905	$	13,016

12

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 decline in gas prices, increase in miles driven, and higher unemployment are examples of factors leading to a short-term frequency change.  A significant long-term increase in claim frequency could have an adverse effect on our underwriting results.

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

# # # # #

13

EX-99.2

Exhibit 99.2

THE ALLSTATE CORPORATION

Investor Supplement

Second Quarter 2011

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

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

THE ALLSTATE CORPORATION

Investor Supplement - Second Quarter 2011

Table of Contents

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

THE ALLSTATE CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

($ in millions, except per share data)

	Three months ended																			Six months ended
		June 30,			March 31,			Dec. 31,			Sept. 30,			June 30,			March 31,			June 30,			June 30,
		2011			2011			2010			2010			2010			2010			2011			2010
Revenues
Property-liability insurance premiums	$	6,457		$	6,448		$	6,442		$	6,499		$	6,513		$	6,503		$	12,905		$	13,016
Life and annuity premiums and contract charges		547			569			531			548			545			544			1,116			1,089
Net investment income		1,020			982			998			1,005			1,049			1,050			2,002			2,099
Realized capital gains and losses:
Total other-than-temporary impairment losses		(82	)		(156	)		(300	)		(99	)		(288	)		(250	)		(238	)		(538	)
Portion of loss recognized in other comprehensive income		(4	)		(27	)		27			(68	)		(18	)		(5	)		(31	)		(23	)
Net other-than-temporary impairment losses recognized in earnings		(86	)		(183	)		(273	)		(167	)		(306	)		(255	)		(269	)		(561	)
Sales and other realized capital gains and losses		143			279			389			23			(145	)		(93	)		422			(238	)
Total realized capital gains and losses		57			96			116			(144	)		(451	)		(348	)		153			(799	)
Total revenues		8,081			8,095			8,087			7,908			7,656			7,749			16,176			15,405
Costs and expenses
Property-liability insurance claims and claims expense		6,355			4,476			4,842			4,603			4,714			4,792			10,831			9,506
Life and annuity contract benefits		422			454			443			445			485			442			876			927
Interest credited to contractholder funds		417			418			449			445			450			463			835			913
Amortization of deferred policy acquisition costs		1,018			1,051			1,065			1,006			949			1,014			2,069			1,963
Operating costs and expenses		802			838			835			828			789			829			1,640			1,618
Restructuring and related charges		11			9			(3	)		9			13			11			20			24
Interest expense		91			92			92			91			92			92			183			184
Total costs and expenses		9,116			7,338			7,723			7,427			7,492			7,643			16,454			15,135
Gain (loss) on disposition of operations		6			(23	)		(1	)		9			2			1			(17	)		3
(Loss) income from operations before income tax (benefit) expense		(1,029	)		734			363			490			166			107			(295	)		273
Income tax (benefit) expense		(409	)		215			67			123			21			(13	)		(194	)		8
Net (loss) income	$	(620	)	$	519		$	296		$	367		$	145		$	120		$	(101	)	$	265
Earnings per share: (1)
Net (loss) income per share - Basic	$	(1.19	)	$	0.98		$	0.55		$	0.68		$	0.27		$	0.22		$	(0.19	)	$	0.49
Weighted average shares - Basic		523.1			531.0			539.5			540.9			540.7			540.5			528.2			540.4
Net (loss) income per share - Diluted (2)	$	(1.19	)	$	0.97		$	0.55		$	0.68		$	0.27		$	0.22		$	(0.19	)	$	0.49
Weighted average shares - Diluted (2)		523.1			533.6			542.0			543.0			543.0			541.8			528.2			542.4
Cash dividends declared per share	$	0.21		$	0.21		$	0.20		$	0.20		$	0.20		$	0.20		$	0.42		$	0.40

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

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

1

THE ALLSTATE CORPORATION

CONTRIBUTION TO INCOME

($ in millions, except per share data)

	Three months ended																			Six months ended
		June 30,			March 31,			Dec. 31,			Sept. 30,			June 30,			March 31,			June 30,			June 30,
		2011			2011			2010			2010			2010			2010			2011			2010
Contribution to income
Operating (loss) income before the impact of restructuring and related charges	$	(635	)	$	503		$	270		$	457		$	450		$	382		$	(132	)	$	832
Restructuring and related charges, after-tax		(7	)		(6	)		1			(5	)		(9	)		(7	)		(13	)		(16	)
Operating (loss) income *		(642	)		497			271			452			441			375			(145	)		816
Realized capital gains and losses, after-tax		36			63			76			(93	)		(294	)		(226	)		99			(520	)
Valuation changes on embedded derivatives that are not hedged, after-tax		(3	)		8			-			-			-			-			5			-
DAC and DSI (amortization) accretion relating to realized capital gains and losses and valuation changes on embedded derivatives that are not hedged, after-tax		(5	)		(26	)		(43	)		7			4			(2	)		(31	)		2
DAC and DSI unlocking relating to realized capital gains and losses, after-tax		-			1			-			-			-			(18	)		1			(18	)
Reclassification of periodic settlements and accruals on non-hedge derivative instruments, after-tax		(10	)		(9	)		(7	)		(5	)		(7	)		(10	)		(19	)		(17	)
Gain (loss) on disposition of operations, after-tax		4			(15	)		(1	)		6			1			1			(11	)		2
Net (loss) income	$	(620	)	$	519		$	296		$	367		$	145		$	120		$	(101	)	$	265
Income per share - Diluted(1) (2)
Operating (loss) income before the impact of restructuring and related charges	$	(1.21	)	$	0.94		$	0.50		$	0.84		$	0.83		$	0.70		$	(0.25	)	$	1.53
Restructuring and related charges, after-tax		(0.02	)		(0.01	)		-			(0.01	)		(0.02	)		(0.01	)		(0.02	)		(0.03	)
Operating (loss) income		(1.23	)		0.93			0.50			0.83			0.81			0.69			(0.27	)		1.50
Realized capital gains and losses, after-tax		0.07			0.12			0.14			(0.17	)		(0.53	)		(0.42	)		0.19			(0.95	)
Valuation changes on embedded derivatives that are not hedged, after-tax		(0.01	)		0.02			-			-			-			-			0.01			-
DAC and DSI (amortization) accretion relating to realized capital gains and losses and valuation changes on embedded derivatives that are not hedged, after-tax		(0.01	)		(0.05	)		(0.08	)		0.01			-			-			(0.06	)		-
DAC and DSI unlocking relating to realized capital gains and losses, after-tax		-			-			-			-			-			(0.03	)		-			(0.03	)
Reclassification of periodic settlements and accruals on non-hedge derivative instruments, after-tax		(0.02	)		(0.02	)		(0.01	)		-			(0.01	)		(0.02	)		(0.04	)		(0.03	)
Gain (loss) on disposition of operations, after-tax		0.01			(0.03	)		-			0.01			-			-			(0.02	)		-
Net (loss) income	$	(1.19	)	$	0.97		$	0.55		$	0.68		$	0.27		$	0.22		$	(0.19	)	$	0.49
Weighted average shares - Diluted		523.1			533.6			542.0			543.0			543.0			541.8			528.2			542.4

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

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

2

THE ALLSTATE CORPORATION

REVENUES

($ in millions)

		Three months ended																		Six months ended
		June 30,			March 31,			Dec. 31,			Sept. 30,			June 30,			March 31,			June 30,			June 30,
		2011			2011			2010			2010			2010			2010			2011			2010
Property-Liability
Property-liability insurance premiums	$	6,457		$	6,448		$	6,442		$	6,499		$	6,513		$	6,503		$	12,905		$	13,016
Net investment income		310			284			291			284			310			304			594			614
Realized capital gains and losses		(8	)		57			82			(107	)		(106	)		(190	)		49			(296	)
Total Property-Liability revenues		6,759			6,789			6,815			6,676			6,717			6,617			13,548			13,334
Allstate Financial
Life and annuity premiums and contract charges		547			569			531			548			545			544			1,116			1,089
Net investment income		694			684			692			707			723			731			1,378			1,454
Realized capital gains and losses		62			39			36			(38	)		(353	)		(162	)		101			(515	)
Total Allstate Financial revenues		1,303			1,292			1,259			1,217			915			1,113			2,595			2,028
Corporate and Other
Service fees (1)		2			2			3			2			3			3			4			6
Net investment income		16			14			15			14			16			15			30			31
Realized capital gains and losses		3			-			(2	)		1			8			4			3			12
Total Corporate and Other revenues before reclassification of services fees		21			16			16			17			27			22			37			49
Reclassification of service fees (1)		(2	)		(2	)		(3	)		(2	)		(3	)		(3	)		(4	)		(6	)
Total Corporate and Other revenues		19			14			13			15			24			19			33			43
Consolidated revenues	$	8,081		$	8,095		$	8,087		$	7,908		$	7,656		$	7,749		$	16,176		$	15,405

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

3

THE ALLSTATE CORPORATION

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

($ in millions)

		June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,			June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,
		2011		2011		2010		2010		2010			2011		2011		2010		2010		2010
Assets											Liabilities
Investments											Reserve for property-liability insurance claims and claims expense	$	20,456	$	19,494	$	19,468	$	19,294	$	19,434
Fixed income securities, at fair value (amortized cost $76,502, $79,292,  $78,786, $80,786 and $81,425)	$	78,414	$	80,242	$	79,612	$	83,193	$	81,925	Reserve for life-contingent contract benefits		13,787		13,552		13,482		13,955		13,483
Equity securities, at fair value(cost $4,329, $3,792, $4,228, $3,447 and $3,356)		4,954		4,437		4,811		3,707		3,254	Contractholder funds		45,078		46,834		48,195		48,936		49,443
Mortgage loans		6,827		6,582		6,679		6,961		7,173	Unearned premiums		9,727		9,563		9,800		10,001		9,684
Limited partnership interests		4,400		4,077		3,816		3,454		3,119	Claim payments outstanding		948		761		737		733		733
Short-term, at fair value (amortized cost $2,536, $1,986, $3,279, $2,776 and $2,414)		2,536		1,986		3,279		2,776		2,414	Other liabilities and accrued expenses		6,152		6,369		5,564		5,945		6,054
Other		2,158		2,287		2,286		2,123		2,058	Long-term debt		5,907		5,908		5,908		5,909		5,909
Total investments		99,289		99,611		100,483		102,214		99,943	Separate Accounts		8,175		8,603		8,676		8,459		8,003
											Total liabilities		110,230		111,084		111,830		113,232		112,743
											Equity
											Common stock, 517 million, 524 million, 533 million, 538 million and 538 million shares outstanding		9		9		9		9		9
											Additional capital paid-in		3,165		3,156		3,176		3,165		3,155
											Retained income		31,647		32,377		31,969		31,781		31,552
											Deferred ESOP expense		(43)		(42)		(44)		(45)		(44	)
											Treasury stock, at cost (383 million, 376 million, 367 million, 362 million and 362 million shares)		(16,387)		(16,173)		(15,910)		(15,755)		(15,760	)
											Accumulated other comprehensive income:
Cash		693		641		562		500		711	Unrealized net capital gains and losses:
Premium installment receivables, net		4,869		4,842		4,839		4,981		4,830	Unrealized net capital losses on fixed income securities with other-than-temporary impairments		(156)		(167)		(190)		(200)		(332	)
Deferred policy acquisition costs		4,572		4,697		4,769		4,671		5,003	Other unrealized net capital gains and losses		1,783		1,186		1,089		1,919		588
Reinsurance recoverables, net (1)		6,446		6,589		6,552		6,597		6,537	Unrealized adjustment to DAC, DSI and insurance reserves		(181)		60		36		(427)		72
Accrued investment income		875		885		809		847		851	Total unrealized net capital gains and losses		1,446		1,079		935		1,292		328
Deferred income taxes		525		612		784		670		1,301	Unrealized foreign currency translation adjustments		83		79		69		54		43
Property and equipment, net		914		912		921		922		935	Unrecognized pension and other postretirement benefit cost		(1,156)		(1,173)		(1,188)		(1,227)		(1,244	)
Goodwill		874		874		874		874		874	Total accumulated other comprehensive income (loss)		373		(15)		(184)		119		(873	)
Other assets		1,791		2,159		1,605		1,799		1,822	Total shareholders' equity		18,764		19,312		19,016		19,274		18,039
Separate Accounts		8,175		8,603		8,676		8,459		8,003	Noncontrolling interest		29		29		28		28		28
											Total equity		18,793		19,341		19,044		19,302		18,067
Total assets	$	129,023	$	130,425	$	130,874	$	132,534	$	130,810	Total liabilities and equity	$	129,023	$	130,425	$	130,874	$	132,534	$	130,810

(1)        Reinsurance recoverables of unpaid losses related to Property-Liability were $2,099 million, $2,134 million, $2,072 million, $2,095 million and $2,176 million as of June 30, 2011, March 31, 2011, December 31, 2010, September 30, 2010 and June 30, 2010, respectively.

4

THE ALLSTATE CORPORATION

BOOK VALUE PER SHARE

($ in millions, except per share data )

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

5

THE ALLSTATE CORPORATION

RETURN ON SHAREHOLDERS’ EQUITY

($ in millions)

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

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

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

6

THE ALLSTATE CORPORATION

DEBT TO CAPITAL

($ in millions)

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

7

THE ALLSTATE CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

($ in millions)

	Three months ended																			Six months ended
		June 30,			March 31,			Dec. 31,			Sept. 30,			June 30,			March 31,			June 30,			June 30,
		2011			2011			2010			2010			2010			2010			2011			2010
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) income	$	(620	)	$	519		$	296		$	367		$	145		$	120		$	(101	)	$	265
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and other non-cash items		58			31			39			29			10			16			89			26
Realized capital gains and losses		(57	)		(96	)		(116	)		144			451			348			(153	)		799
(Gain) loss on disposition of operations		(6	)		23			1			(9	)		(2	)		(1	)		17			(3	)
Interest credited to contractholder funds		417			418			449			445			450			463			835			913
Changes in:
Policy benefits and other insurance reserves		723			(58	)		95			(163	)		118			188			665			306
Unearned premiums		161			(248	)		(212	)		307			126			(261	)		(87	)		(135	)
Deferred policy acquisition costs		(15	)		72			44			(68	)		(100	)		30			57			(70	)
Premium installment receivables, net		(25	)		3			147			(146	)		(15	)		24			(22	)		9
Reinsurance recoverables, net		77			(117	)		(36	)		(23	)		(134	)		(72	)		(40	)		(206	)
Income taxes		(426	)		200			22			104			1			73			(226	)		74
Other operating assets and liabilities		247			(21	)		(63	)		(58	)		80			36			226			116
Net cash provided by operating activities		534			726			666			929			1,130			964			1,260			2,094
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sales
Fixed income securities		5,777			8,363			5,536			8,231			4,184			4,930			14,140			9,114
Equity securities		212			642			87			1,216			1,056			1,990			854			3,046
Limited partnership interests		222			113			118			109			132			146			335			278
Mortgage loans		39			26			3			77			41			3			65			44
Other investments		46			63			23			36			25			37			109			62
Investment collections
Fixed income securities		1,184			1,201			1,475			1,281			1,269			1,122			2,385			2,391
Mortgage loans		220			88			292			146			375			263			308			638
Other investments		15			77			41			52			26			18			92			44
Investment purchases
Fixed income securities		(3,727	)		(10,207	)		(5,033	)		(8,812	)		(4,801	)		(7,099	)		(13,934	)		(11,900	)
Equity securities		(637	)		(144	)		(843	)		(1,220	)		(945	)		(556	)		(781	)		(1,501	)
Limited partnership interests		(431	)		(334	)		(302	)		(424	)		(431	)		(185	)		(765	)		(616	)
Mortgage loans		(510	)		(26	)		(65	)		(45	)		(9	)		(1	)		(536	)		(10	)
Other investments		(88	)		(58	)		(82	)		(20	)		(36	)		(43	)		(146	)		(79	)
Change in short-term investments, net		(483	)		1,649			(486	)		(335	)		28			411			1,166			439
Change in other investments, net		(51	)		(119	)		(55	)		(336	)		(79	)		(49	)		(170	)		(128	)
Purchases of property and equipment, net		(58	)		(48	)		(48	)		(45	)		(45	)		(24	)		(106	)		(69	)
Disposition of operations		-			(1	)		-			7			-			-			(1	)		-
Net cash provided by (used in) investing activities		1,730			1,285			661			(82	)		790			963			3,015			1,753
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of long-term debt		(1	)		-			(1	)		-			(1	)		-			(1	)		(1	)
Contractholder fund deposits		524			596			683			730			739			828			1,120			1,567
Contractholder fund withdrawals		(2,386	)		(2,122	)		(1,691	)		(1,667	)		(2,543	)		(2,569	)		(4,508	)		(5,112	)
Dividends paid		(111	)		(107	)		(108	)		(107	)		(108	)		(107	)		(218	)		(215	)
Treasury stock purchases		(239	)		(305	)		(147	)		-			-			(5	)		(544	)		(5	)
Shares reissued under equity incentive plans, net		8			9			2			1			11			14			17			25
Excess tax benefits on share-based payment arrangements		-			(3	)		-			(3	)		(2	)		(2	)		(3	)		(4	)
Other		(7	)		-			(3	)		(12	)		(9	)		6			(7	)		(3	)
Net cash used in financing activities		(2,212	)		(1,932	)		(1,265	)		(1,058	)		(1,913	)		(1,835	)		(4,144	)		(3,748	)
NET INCREASE (DECREASE) IN CASH		52			79			62			(211	)		7			92			131			99
CASH AT BEGINNING OF PERIOD		641			562			500			711			704			612			562			612
CASH AT END OF PERIOD	$	693		$	641		$	562		$	500		$	711		$	704		$	693		$	711

8

THE ALLSTATE CORPORATION

ANALYSIS OF DEFERRED POLICY ACQUISITION COSTS

($ in millions)

	Change in Deferred Policy Acquisition Costs
	For the three months ended June 30, 2011
									Amortization
									relating to realized
									capital gains and			Amortization
									losses and			(acceleration)		Effect of
		Beginning		Acquisition		Amortization			valuation changes on			deceleration		unrealized			Ending
		balance		costs		before			embedded derivatives			(charged) credited		capital gains			balance
		March 31, 2011		deferred		adjustments (1)(2)			that are not hedged (2)			to income (2)		and losses			June 30, 2011
Property-Liability	$	1,351	$	926	$	(908	)	$	-		$	-	$	-		$	1,369
Allstate Financial:
Traditional life and accident and health		702		42		(30	)		-			-		-			714
Interest-sensitive life		2,236		56		(54	)		(1	)		-		(67	)		2,170
Fixed annuity		405		8		(19	)		(6	)		-		(72	)		316
Other		3		-		-			-			-		-			3
Sub-total		3,346		106		(103	)		(7	)		-		(139	)		3,203
Consolidated	$	4,697	$	1,032	$	(1,011	)	$	(7	)	$	-	$	(139	)	$	4,572
	Change in Deferred Policy Acquisition Costs
	For the three months ended June 30, 2010
									Accretion			Amortization
									(amortization)			(acceleration)		Effect of
		Beginning		Acquisition		Amortization			relating to realized			deceleration		unrealized			Ending
		balance		costs		before			capital gains and			(charged) credited		capital gains			balance
		March 31, 2010		deferred		adjustments (1)(2)			losses (2)			to income (2)		and losses			June 30, 2010
Property-Liability	$	1,357	$	924	$	(914	)	$	-		$	-	$	-		$	1,367
Allstate Financial:
Traditional life and
accident and health		659		37		(27	)		-			-		-			669
Interest-sensitive life		2,209		70		5			8			-		(67	)		2,225
Fixed annuity		956		16		(18	)		(2	)		-		(214	)		738
Other		5		-		(1	)		-			-		-			4
Sub-total		3,829		123		(41	)		6			-		(281	)		3,636
Consolidated	$	5,186	$	1,047	$	(955	)	$	6		$	-	$	(281	)	$	5,003

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

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

9

THE ALLSTATE CORPORATION

ANALYSIS OF DEFERRED POLICY ACQUISITION COSTS

($ in millions)

	Change in Deferred Policy Acquisition Costs																			Reconciliation of Deferred Policy
	For the six months ended June 30, 2011																			Acquisition Costs as of June 30, 2011
									Amortization
									relating to realized
									capital gains and			Amortization								DAC before					DAC after
									losses and			(acceleration)			Effect of					impact of		Impact of			impact of
		Beginning		Acquisition		Amortization			valuation changes on			deceleration			unrealized			Ending		unrealized		unrealized			unrealized
		balance		costs		before			embedded derivatives			(charged) credited			capital gains			balance		capital gains		capital gains			capital gains
		Dec. 31, 2010		deferred		adjustments (1) (2)			that are not hedged (2)			to income (2)			and losses			June 30, 2011		and losses		and losses			and losses
Property-Liability	$	1,377	$	1,804	$	(1,812	)	$	-		$	-		$	-		$	1,369	$	1,369	$	-		$	1,369
Allstate Financial:
Traditional life and accident and health		693		83		(62	)		-			-			-			714		714		-			714
Interest-sensitive life		2,265		112		(108	)		(11	)		(17	)		(71	)		2,170		2,288		(118	)		2,170
Fixed annuity		431		14		(33	)		(31	)		5			(70	)		316		264		52			316
Other		3		-		-			-			-			-			3		3		-			3
Sub-total		3,392		209		(203	)		(42	)		(12	)		(141	)		3,203		3,269		(66	)		3,203
Consolidated	$	4,769	$	2,013	$	(2,015	)	$	(42	)	$	(12	)	$	(141	)	$	4,572	$	4,638	$	(66	)	$	4,572
	Change in Deferred Policy Acquisition Costs																			Reconciliation of Deferred Policy
	For the six months ended June 30, 2010																			Acquisition Costs as of June 30, 2010
									Accretion			Amortization								DAC before					DAC after
									(amortization)			(acceleration)			Effect of					impact of		Impact of			impact of
		Beginning		Acquisition		Amortization			relating to realized			deceleration			unrealized			Ending		unrealized		unrealized			unrealized
		balance		costs		before			capital gains and			(charged) credited			capital gains			balance		capital gains		capital gains			capital gains
		Dec. 31, 2009		deferred		adjustments (1) (2)			losses (2)			to income (2)			and losses			June 30, 2010		and losses		and losses			and losses
Property-Liability	$	1,410	$	1,796	$	(1,839	)	$	-		$	-		$	-		$	1,367	$	1,367	$	-		$	1,367
Allstate Financial:
Traditional life and accident and health		650		75		(56	)		-			-			-			669		669		-			669
Interest-sensitive life		2,246		131		(39	)		6			13			(132	)		2,225		2,260		(35	)		2,225
Fixed annuity		1,159		31		(43	)		(3	)		(1	)		(405	)		738		370		368			738
Other		5		-		(1	)		-			-			-			4		4		-			4
Sub-total		4,060		237		(139	)		3			12			(537	)		3,636		3,303		333			3,636
Consolidated	$	5,470	$	2,033	$	(1,978	)	$	3		$	12		$	(537	)	$	5,003	$	4,670	$	333		$	5,003

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

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

10

THE ALLSTATE CORPORATION

PROPERTY-LIABILITY RESULTS

($ in millions, except ratios)

	Three months ended																			Six months ended
		June 30,			March 31,			Dec. 31,			Sept. 30,			June 30,			March 31,			June 30,			June 30,
		2011			2011			2010			2010			2010			2010			2011			2010
Premiums written *	$	6,611		$	6,215		$	6,242		$	6,767		$	6,640		$	6,258		$	12,826		$	12,898
(Increase) decrease in unearned premiums		(165	)		234			203			(319	)		(110	)		245			69			135
Other		11			(1	)		(3	)		51			(17	)		-			10			(17	)
Premiums earned		6,457			6,448			6,442			6,499			6,513			6,503			12,905			13,016
Claims and claims expense		(6,355	)		(4,476	)		(4,842	)		(4,603	)		(4,714	)		(4,792	)		(10,831	)		(9,506	)
Amortization of deferred policy acquisition costs		(908	)		(904	)		(924	)		(915	)		(914	)		(925	)		(1,812	)		(1,839	)
Operating costs and expenses		(685	)		(730	)		(726	)		(706	)		(664	)		(704	)		(1,415	)		(1,368	)
Restructuring and related charges		(11	)		(11	)		1			(9	)		(14	)		(11	)		(22	)		(25	)
Underwriting (loss) income *		(1,502	)		327			(49	)		266			207			71			(1,175	)		278
Net investment income		310			284			291			284			310			304			594			614
Periodic settlements and accruals on non-hedge derivative instruments		(3	)		(4	)		(3	)		(2	)		(1	)		(1	)		(7	)		(2	)
Income tax benefit (expense) on operations		462			(180	)		(33	)		(154	)		(148	)		(88	)		282			(236	)
Operating (loss) income		(733	)		427			206			394			368			286			(306	)		654
Realized capital gains and losses, after-tax		(6	)		38			54			(69	)		(69	)		(123	)		32			(192	)
(Loss) gain on disposition of operations, after-tax		-			-			(1	)		4			-			-			-			-
Reclassification of periodic settlements and accruals on non-hedge derivative instruments, after-tax		1			3			1			2			-			1			4			1
Net (loss) income	$	(738	)	$	468		$	260		$	331		$	299		$	164		$	(270	)	$	463
Catastrophe losses	$	2,339		$	333		$	537		$	386		$	636		$	648		$	2,672		$	1,284
Operating ratios *
Claims and claims expense (“loss”) ratio		98.4			69.4			75.2			70.8			72.4			73.7			83.9			73.1
Expense ratio		24.9			25.5			25.6			25.1			24.4			25.2			25.2			24.8
Combined ratio		123.3			94.9			100.8			95.9			96.8			98.9			109.1			97.9
Combined ratio excluding the effect of catastrophes *		87.1			89.7			92.5			90.0			87.0			88.9			88.4			88.0
Effect of catastrophe losses on combined ratio *		36.2			5.2			8.3			5.9			9.8			10.0			20.7			9.9
Combined ratio		123.3			94.9			100.8			95.9			96.8			98.9			109.1			97.9
Combined ratio excluding the effect of catastrophes and prior year reserve reestimates (“underlying”) *		87.5			89.9			92.0			89.2			88.1			89.1			88.7			88.6
Effect of catastrophe losses on combined ratio *		36.2			5.2			8.3			5.9			9.8			10.0			20.7			9.9
Effect of prior year reserve reestimates on combined ratio *		(0.7	)		(0.7	)		0.1			0.2			(2.3	)		(0.4	)		(0.7	)		(1.3	)
Effect of catastrophe losses included in prior year reserve reestimates on combined ratio		0.3			0.5			0.4			0.6			1.2			0.2			0.4			0.7
Combined ratio		123.3			94.9			100.8			95.9			96.8			98.9			109.1			97.9
Effect of restructuring and related charges on combined ratio *		0.2			0.2			-			0.1			0.2			0.2			0.2			0.2
Effect of Discontinued Lines and Coverages on combined ratio		0.1			0.1			0.1			0.3			-			0.1			0.1			0.1

11

THE ALLSTATE CORPORATION

PROPERTY-LIABILITY UNDERWRITING RESULTS BY AREA OF BUSINESS

($ in millions)

	Three months ended																			Six months ended
		June 30,			March 31,			Dec. 31,			Sept. 30,			June 30,			March 31,			June 30,			June 30,
		2011			2011			2010			2010			2010			2010			2011			2010
Property-Liability Underwriting Summary
Allstate Protection	$	(1,498	)	$	333		$	(45	)	$	287		$	209		$	75		$	(1,165	)	$	284
Discontinued Lines and Coverages		(4	)		(6	)		(4	)		(21	)		(2	)		(4	)		(10	)		(6	)
Underwriting (loss) income	$	(1,502	)	$	327		$	(49	)	$	266		$	207		$	71		$	(1,175	)	$	278
Allstate Protection Underwriting Summary
Premiums written	$	6,611		$	6,216		$	6,241		$	6,767		$	6,640		$	6,258		$	12,827		$	12,898
Premiums earned	$	6,457		$	6,449		$	6,441		$	6,498		$	6,513		$	6,503		$	12,906		$	13,016
Claims and claims expense		(6,352	)		(4,472	)		(4,838	)		(4,582	)		(4,713	)		(4,790	)		(10,824	)		(9,503	)
Amortization of deferred policy acquisition costs		(908	)		(904	)		(924	)		(915	)		(914	)		(925	)		(1,812	)		(1,839	)
Operating costs and expenses		(684	)		(729	)		(725	)		(705	)		(663	)		(702	)		(1,413	)		(1,365	)
Restructuring and related charges		(11	)		(11	)		1			(9	)		(14	)		(11	)		(22	)		(25	)
Underwriting (loss) income	$	(1,498	)	$	333		$	(45	)	$	287		$	209		$	75		$	(1,165	)	$	284
Catastrophe losses	$	2,339		$	333		$	537		$	386		$	636		$	648		$	2,672		$	1,284
Operating ratios
Loss ratio		98.4			69.3			75.1			70.5			72.4			73.6			83.9			73.0
Expense ratio		24.8			25.5			25.6			25.1			24.4			25.2			25.1			24.8
Combined ratio		123.2			94.8			100.7			95.6			96.8			98.8			109.0			97.8
Effect of catastrophe losses on combined ratio		36.2			5.2			8.3			5.9			9.8			10.0			20.7			9.9
Effect of restructuring and related charges on combined ratio		0.2			0.2			-			0.1			0.2			0.2			0.2			0.2
Discontinued Lines and Coverages Underwriting Summary
Premiums written	$	-		$	(1	)	$	1		$	-		$	-		$	-		$	(1	)	$	-
Premiums earned	$	-		$	(1	)	$	1		$	1		$	-		$	-		$	(1	)	$	-
Claims and claims expense		(3	)		(4	)		(4	)		(21	)		(1	)		(2	)		(7	)		(3	)
Operating costs and expenses		(1	)		(1	)		(1	)		(1	)		(1	)		(2	)		(2	)		(3	)
Underwriting loss	$	(4	)	$	(6	)	$	(4	)	$	(21	)	$	(2	)	$	(4	)	$	(10	)	$	(6	)
Effect of Discontinued Lines and Coverages on the Property-Liability combined ratio		0.1			0.1			0.1			0.3			-			0.1			0.1			0.1

12

THE ALLSTATE CORPORATION

PROPERTY-LIABILITY PREMIUMS WRITTEN BY MARKET SEGMENT

($ in millions)

	Three months ended														Six months ended
		June 30,		March 31,			Dec. 31,		Sept. 30,		June 30,		March 31,		June 30,			June 30,
		2011		2011			2010		2010		2010		2010		2011			2010
Allstate brand (1)
Standard auto	$	3,911	$	3,984		$	3,843	$	4,028	$	3,948	$	4,023	$	7,895		$	7,971
Non-standard auto		197		210			203		223		220		237		407			457
Auto		4,108		4,194			4,046		4,251		4,168		4,260		8,302			8,428
Involuntary auto		21		19			22		18		25		16		40			41
Commercial lines		125		120			120		130		137		131		245			268
Homeowners		1,606		1,225			1,389		1,610		1,565		1,189		2,831			2,754
Other personal lines		478		413			408		468		457		399		891			856
		6,338		5,971			5,985		6,477		6,352		5,995		12,309			12,347
Encompass brand
Standard auto		154		144			149		166		169		160		298			329
Non-standard auto		-		1			1		1		1		3		1			4
Auto		154		145			150		167		170		163		299			333
Involuntary auto		3		3			2		3		3		2		6			5
Homeowners		94		79			85		98		94		80		173			174
Other personal lines		22		18			19		22		21		18		40			39
		273		245			256		290		288		263		518			551
Allstate Protection		6,611		6,216			6,241		6,767		6,640		6,258		12,827			12,898
Discontinued Lines and Coverages		-		(1	)		1		-		-		-		(1	)		-
Property-Liability	$	6,611	$	6,215		$	6,242	$	6,767	$	6,640	$	6,258	$	12,826		$	12,898
Allstate Protection
Standard auto	$	4,065	$	4,128		$	3,992	$	4,194	$	4,117	$	4,183	$	8,193		$	8,300
Non-standard auto		197		211			204		224		221		240		408			461
Auto		4,262		4,339			4,196		4,418		4,338		4,423		8,601			8,761
Involuntary auto		24		22			24		21		28		18		46			46
Commercial lines		125		120			120		130		137		131		245			268
Homeowners		1,700		1,304			1,474		1,708		1,659		1,269		3,004			2,928
Other personal lines		500		431			427		490		478		417		931			895
	$	6,611	$	6,216		$	6,241	$	6,767	$	6,640	$	6,258	$	12,827		$	12,898

(1) Allstate brand premiums written by the direct channel, excluding Allstate Canada, totaled $200 million, $206 million, $184 million, $195 million, $181 million and $185 million for the three months ended June 30, 2011, March 31, 2011, December 31, 2010, September 30, 2010, June 30, 2010 and March 31, 2010, respectively.  Allstate brand premiums written by the direct channel totaled $406 million and $366 million for the six months ended June 30, 2011 and June 30, 2010, respectively. The direct channel includes call centers and the internet.

13

THE ALLSTATE CORPORATION

ALLSTATE PROTECTION MARKET SEGMENT ANALYSIS

($ in millions)

		Three months ended June 30,
		2011		2010		2011		2010		2011		2010		2011		2010	2011	2010	2011	2010	2011	2010	2011		2010
																			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	$	3,938	$	3,969	$	2,882	$	2,783	$	264	$	78	$	986	$	969	73.2	70.1	6.7	2.0	25.0	24.4	(2.2	)	(1.9	)
Non-standard auto		205		228		142		157		8		1		48		60	69.3	68.9	3.9	0.4	23.4	26.3	(1.0	)	(4.8	)
Auto		4,143		4,197		3,024		2,940		272		79		1,034		1,029	73.0	70.1	6.6	1.9	24.9	24.5	(2.1	)	(2.1	)
Homeowners		1,457		1,416		2,493		1,169		1,795		492		325		309	171.1	82.6	123.2	34.7	22.3	21.8	0.3		(4.2	)
Other personal lines (1)		587		592		590		389		207		49		165		168	100.5	65.7	35.3	8.3	28.1	28.4	6.1		(0.7	)
Total Allstate brand		6,187		6,205		6,107		4,498		2,274		620		1,524		1,506	98.7	72.5	36.8	10.0	24.6	24.3	(0.8	)	(2.4	)
Encompass brand
Standard auto		155		185		122		135		5		1		44		50	78.7	73.0	3.2	0.5	28.4	27.0	-		1.6
Non-standard auto		1		2		1		2		-		-		-		1	100.0	100.0	-	-	-	50.0	(100.0	)	-
Auto		156		187		123		137		5		1		44		51	78.9	73.3	3.2	0.5	28.2	27.3	(0.6	)	1.6
Homeowners		91		96		98		62		56		15		29		29	107.7	64.6	61.5	15.6	31.9	30.2	(1.1	)	(1.0	)
Other personal lines (1)		23		25		24		16		4		-		6		5	104.3	64.0	17.4	-	26.1	20.0	-		(4.0	)
Total Encompass brand		270		308		245		215		65		16		79		85	90.7	69.8	24.1	5.2	29.3	27.6	(0.7	)	0.3
Allstate Protection	$	6,457	$	6,513	$	6,352	$	4,713	$	2,339	$	636	$	1,603	$	1,591	98.4	72.4	36.2	9.8	24.8	24.4	(0.8	)	(2.3	)
		Six months ended June 30,
		2011		2010		2011		2010		2011		2010		2011		2010	2011	2010	2011	2010	2011	2010	2011		2010
																			Effect of				Effect of pre-tax
										Incurred									catastrophe losses				reserve reestimates
		Premiums earned				Incurred losses				catastrophe losses				Expenses			Loss ratio (2)		on the loss ratio		Expense ratio		on the combined ratio
Allstate brand
Standard auto	$	7,866	$	7,912	$	5,642	$	5,522	$	282	$	106	$	1,960	$	1,954	71.7	69.8	3.6	1.3	24.9	24.7	(1.3	)	(1.0	)
Non-standard auto		415		458		278		315		8		2		96		116	67.0	68.8	1.9	0.4	23.1	25.3	(2.2	)	(3.1	)
Auto		8,281		8,370		5,920		5,837		290		108		2,056		2,070	71.5	69.8	3.5	1.3	24.8	24.7	(1.4	)	(1.1	)
Homeowners		2,905		2,832		3,476		2,408		2,052		1,017		666		646	119.7	85.0	70.6	35.9	22.9	22.8	(1.2	)	(2.3	)
Other personal lines (1)		1,175		1,184		986		765		248		92		367		341	83.9	64.6	21.1	7.8	31.2	28.8	4.3		(2.3	)
Total Allstate brand		12,361		12,386		10,382		9,010		2,590		1,217		3,089		3,057	84.0	72.7	21.0	9.8	25.0	24.7	(0.8	)	(1.5	)
Encompass brand
Standard auto		315		379		243		284		5		3		89		101	77.1	74.9	1.6	0.8	28.3	26.7	1.6		3.4
Non-standard auto		2		6		2		6		-		-		1		2	100.0	100.0	-	-	50.0	33.3	(50.0	)	-
Auto		317		385		245		290		5		3		90		103	77.3	75.3	1.6	0.8	28.4	26.8	1.3		3.4
Homeowners		182		196		158		165		71		61		57		58	86.8	84.2	39.0	31.1	31.3	29.6	-		(1.5	)
Other personal lines (1)		46		49		39		38		6		3		11		11	84.8	77.6	13.0	6.1	23.9	22.4	(4.3	)	-
Total Encompass brand		545		630		442		493		82		67		158		172	81.1	78.3	15.0	10.6	29.0	27.3	0.4		1.6
Allstate Protection	$	12,906	$	13,016	$	10,824	$	9,503	$	2,672	$	1,284	$	3,247	$	3,229	83.9	73.0	20.7	9.9	25.1	24.8	(0.7	)	(1.4	)

(1)	Other personal lines includes commercial, condominium, renters, involuntary auto and other personal lines.
(2)	Ratios are calculated using the premiums earned for the respective line of business.

14

THE ALLSTATE CORPORATION

ALLSTATE PROTECTION HISTORICAL MARKET SEGMENT ANALYSIS

($ in millions)

		Three months ended					Three months ended					Three months ended					Three months ended
		June 30, 2011					March 31, 2011					December 31, 2010					September 30, 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	$	3,938	73.2	6.7	25.0	$	3,928	70.3	0.5	24.8	$	3,941	74.6	0.8	25.1	$	3,961	68.7	0.4	24.5
Non-standard auto		205	69.3	3.9	23.4		210	64.8	-	22.8		216	69.4	0.5	17.6		222	61.7	-	27.5
Auto		4,143	73.0	6.6	24.9		4,138	70.0	0.4	24.7		4,157	74.4	0.8	24.7		4,183	68.4	0.4	24.6
Homeowners		1,457	171.1	123.2	22.3		1,448	67.9	17.7	23.5		1,431	77.8	30.3	24.2		1,430	80.5	23.1	24.2
Other personal lines (1)		587	100.5	35.3	28.1		588	67.3	7.0	34.4		573	75.2	9.1	33.9		591	61.4	4.4	27.3
Total Allstate brand		6,187	98.7	36.8	24.6		6,174	69.2	5.1	25.4		6,161	75.2	8.4	25.5		6,204	70.5	6.0	24.8
Encompass brand
Standard auto		155	78.7	3.2	28.4		160	75.7	-	28.1		164	76.2	1.2	27.5		173	75.7	0.6	30.1
Non-standard auto		1	100.0	-	-		1	100.0	-	100.0		1	100.0	-	200.0		2	100.0	-	50.0
Auto		156	78.9	3.2	28.2		161	75.8	-	28.5		165	76.3	1.2	28.5		175	76.0	0.6	30.3
Homeowners		91	107.7	61.5	31.9		91	65.9	16.5	30.8		93	64.5	16.1	30.1		96	63.5	13.5	32.3
Other personal lines (1)		23	104.3	17.4	26.1		23	65.2	8.7	21.8		22	77.3	4.5	22.7		23	60.9	-	30.4
Total Encompass brand		270	90.7	24.1	29.3		275	71.7	6.2	28.7		280	72.5	6.4	28.6		294	70.7	4.8	31.0
Allstate Protection	$	6,457	98.4	36.2	24.8	$	6,449	69.3	5.2	25.5	$	6,441	75.1	8.3	25.6	$	6,498	70.5	5.9	25.1
		Three months ended					Three months ended					Three months ended					Three months ended
		June 30, 2010					March 31, 2010					December 31, 2009					September 30, 2009
				Effect of					Effect of					Effect of					Effect of
		Premiums	Loss	CAT losses	Expense		Premiums	Loss	CAT losses	Expense		Premiums	Loss	CAT losses	Expense		Premiums	Loss	CAT losses	Expense
		earned	ratio	on loss ratio	ratio		earned	ratio	on loss ratio	ratio		earned	ratio	on loss ratio	ratio		earned	ratio	on loss ratio	ratio
Allstate brand
Standard auto	$	3,969	70.1	2.0	24.4	$	3,943	69.4	0.7	25.0	$	3,944	69.2	(0.3)	24.5	$	3,946	68.6	1.3	24.1
Non-standard auto		228	68.9	0.4	26.3		230	68.7	0.4	24.3		231	69.3	0.4	25.1		231	63.6	0.4	25.6
Auto		4,197	70.1	1.9	24.5		4,173	69.4	0.7	25.0		4,175	69.2	(0.3)	24.5		4,177	68.4	1.3	24.1
Homeowners		1,416	82.6	34.7	21.8		1,416	87.5	37.1	23.8		1,411	65.1	20.6	23.9		1,396	75.4	22.3	22.9
Other personal lines (1)		592	65.7	8.3	28.4		592	63.5	7.3	29.2		591	66.7	6.6	28.6		601	64.1	4.0	31.6
Total Allstate brand		6,205	72.5	10.0	24.3		6,181	73.0	9.7	25.1		6,177	68.0	5.1	24.8		6,174	69.5	6.3	24.6
Encompass brand
Standard auto		185	73.0	0.5	27.0		194	76.8	1.0	26.3		205	77.5	(0.5)	25.4		221	76.9	0.5	25.4
Non-standard auto		2	100.0	-	50.0		4	100.0	-	25.0		5	80.0	-	40.0		6	66.7	-	50.0
Auto		187	73.2	0.5	27.3		198	77.3	1.0	26.2		210	77.6	(0.5)	25.7		227	76.6	0.4	26.0
Homeowners		96	64.6	15.6	30.2		100	103.0	46.0	29.0		104	57.7	9.6	29.8		108	67.6	15.7	29.6
Other personal lines (1)		25	64.0	-	20.0		24	91.7	12.5	25.0		26	88.4	3.8	23.1		26	65.4	-	26.9
Total Encompass brand		308	69.8	5.2	27.6		322	86.4	15.8	27.0		340	72.3	2.9	26.8		361	73.1	5.0	27.2
Allstate Protection	$	6,513	72.4	9.8	24.4	$	6,503	73.6	10.0	25.2	$	6,517	68.2	5.0	24.9	$	6,535	69.7	6.2	24.7

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

15

THE ALLSTATE CORPORATION

PROPERTY-LIABILITY

HISTORICAL IMPACT OF NET RATE CHANGES APPROVED ON PREMIUMS WRITTEN

	Three months ended				Three months ended				Three months ended				Three months ended
	June 30, 2011 (1)				March 31, 2011				December 31, 2010				September 30, 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)	18	(9)	1.9	5.3	13	(7)(8)	1.1	4.1	14	(6)(7)	0.4	1.3	21	(7)	0.5		2.8
Non-standard auto	3		0.4	6.1	3		3.6	18.4	2		0.4	3.2	4		0.7		5.8
Auto	18		1.9	5.3	15		1.3	4.7	14	(6)	0.4	1.4	24		0.5		2.9
Homeowners (3)	18		1.5	6.0	12	(6)	1.8	9.9	10		3.2	7.4	15		1.0		4.2
Encompass brand
Standard auto	3		0.3	4.0	3		0.6	5.0	6		0.1	1.1	12		(0.1	)	(1.3	)
Non-standard auto	-		-	-	-		-	-	-		-	-	-		-		-
Auto	3		0.3	4.0	3		0.6	5.0	6		0.1	1.1	12		(0.1	)	(1.3	)
Homeowners	11	(6)	0.3	2.6	5		1.2	4.9	5		0.1	0.8	8	(6)	-		(0.1	)

	Three months ended						Three months ended			Three months ended			Three months ended
	June 30, 2010						March 31, 2010			December 31, 2009			September 30, 2009
	Number of				State		Number of		State	Number of		State	Number of			State
	states		Countrywide (%) (4)		specific (%) (5)		states	Countrywide (%) (4)	specific (%) (5)	states	Countrywide (%) (4)	specific (%) (5)	states		Countrywide (%) (4)	specific (%) (5)
Allstate brand
Standard auto (2)	32	(6)(7)	0.2		0.5		8	0.3	2.9	15	1.5	5.5	15		1.4	6.5
Non-standard auto	5	(6)	2.7		10.9		1	0.9	22.1	4	1.1	9.4	4		1.2	5.5
Auto	33	(6)	0.3		0.9		9	0.3	3.3	17	1.5	5.6	17		1.4	6.4
Homeowners (3)	14	(6)	2.0		11.3		6	0.9	7.4	22	1.9	6.5	19	(6)	2.4	6.9
Encompass brand
Standard auto	10		(0.1	)	(0.5	)	6	1.5	7.1	11	1.3	9.5	13		1.6	9.6
Non-standard auto	-		-		-		-	-	-	-	-	-	-		-	-
Auto	10		(0.1	)	(0.5	)	6	1.4	7.1	11	1.3	9.5	13		1.6	9.6
Homeowners	7		-		(0.3	)	5	0.7	5.2	10	0.6	7.9	17		2.0	4.8

(1)	Rate changes include changes approved based on our net cost of reinsurance. These rate changes do not reflect initial rates filed for insurance subsidiaries initially writing business. Based on historical premiums written in those states, rate changes approved for the three month period ending June 30, 2011 are estimated to total $395 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 0.5%, 1.4%, 0.6%, 0.2%, (0.1)%, 1.5%, 1.6% and 0.5% for the three months ended June 30, 2011, March 31, 2011, December 31, 2010, September 30, 2010, June 30, 2010, March 31, 2010, December 31, 2009 and September 30, 2009, respectively.
(3)	Impacts of Allstate brand homeowners effective rate changes as a percentage of total countrywide prior year-end premiums written were 1.2%, 2.9%, 2.5% 1.0%, 1.7%, 1.5%, 1.5% and 2.4% for the three months ended June 30, 2011, March 31, 2011, December 31, 2010, September 30, 2010, June 30, 2010, March 31, 2010, December 31, 2009 and September 30, 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).
(8)	Includes the impact of a 20.9% and 2.3% rate increases in Florida and a 12.0% rate increase in New York in the first quarter of 2011.
(9)	Includes the impact of a 20.0% and 6.0% rate increases in Florida and a 3.7% rate increase in New York in the second quarter of 2011.

16

THE ALLSTATE CORPORATION

STANDARD AUTO PROFITABILITY MEASURES

	Three months ended																		Six months ended
		June 30,			March 31,			Dec. 31,			Sept. 30,			June 30,		March 31,			June 30,			June 30,
		2011			2011			2010			2010			2010		2010			2011			2010
Standard auto
($ in millions)
Net premiums written
Allstate brand	$	3,911		$	3,984		$	3,843		$	4,028		$	3,948	$	4,023		$	7,895		$	7,971
Encompass brand		154			144			149			166			169		160			298			329
		4,065			4,128			3,992			4,194			4,117		4,183			8,193			8,300
Net premiums earned
Allstate brand	$	3,938		$	3,928		$	3,941		$	3,961		$	3,969	$	3,943		$	7,866		$	7,912
Encompass brand		155			160			164			173			185		194			315			379
		4,093			4,088			4,105			4,134			4,154		4,137			8,181			8,291
Incurred losses
Allstate brand	$	2,882		$	2,760		$	2,941		$	2,723		$	2,783	$	2,739		$	5,642		$	5,522
Encompass brand		122			121			125			131			135		149			243			284
		3,004			2,881			3,066			2,854			2,918		2,888			5,885			5,806
Expenses
Allstate brand	$	986		$	974		$	990		$	970		$	969	$	985		$	1,960		$	1,954
Encompass brand		44			45			45			52			50		51			89			101
		1,030			1,019			1,035			1,022			1,019		1,036			2,049			2,055
Underwriting Income
Allstate brand	$	70		$	194		$	10		$	268		$	217	$	219		$	264		$	436
Encompass brand		(11	)		(6	)		(6	)		(10	)		-		(6	)		(17	)		(6	)
		59			188			4			258			217		213			247			430
Loss ratio
Allstate brand (1)		73.2			70.3			74.6			68.7			70.1		69.4			71.7			69.8
Encompass brand		78.7			75.7			76.2			75.7			73.0		76.8			77.1			74.9
Allstate Protection		73.4			70.5			74.7			69.1			70.3		69.8			71.9			70.0
Expense ratio
Allstate brand		25.0			24.8			25.1			24.5			24.4		25.0			24.9			24.7
Encompass brand		28.4			28.1			27.5			30.1			27.0		26.3			28.3			26.7
Allstate Protection		25.2			24.9			25.2			24.7			24.5		25.1			25.1			24.8
Combined ratio
Allstate brand		98.2			95.1			99.7			93.2			94.5		94.4			96.6			94.5
Encompass brand		107.1			103.8			103.7			105.8			100.0		103.1			105.4			101.6
Allstate Protection		98.6			95.4			99.9			93.8			94.8		94.9			97.0			94.8
Effect of catastrophe losses on loss ratio
Allstate brand		6.7			0.5			0.8			0.4			2.0		0.7			3.6			1.3
Encompass brand		3.2			-			1.2			0.6			0.5		1.0			1.6			0.8
Allstate brand standard auto domestic operating measures (2)
		June 30,			March 31,			Dec. 31,			Sept. 30,			June 30,		March 31,			June 30,			June 30,
		2011			2011			2010			2010			2010		2010			2011			2010
Operating measures (3)
Policies in force (in thousands)		17,420			17,456			17,484			17,479			17,529		17,581			17,420			17,529
New issued applications (in thousands) (4)		472			519			526			537			498		464			991			962
New items added to existing policies (in thousands) (5)		386			363			340			394			397		367			749			764
Average premium - gross written ($) (6)		442			439			442			441			444		443			441			444
Average premium - net earned ($)		429			430			433			432			433		430			429			432
Renewal ratio (%)		89.2			88.9			88.4			88.7			89.0		88.8			89.0			88.9
Loss trends
(% change year-over-year)
Bodily injury claim frequency		(2.3	)		3.1			7.7			7.5			4.2		5.4			0.3			4.8
Property damage claim frequency		(3.9	)		1.2			2.4			3.7			1.9		(0.1	)		(1.4	)		0.9

(1)	In the first six months of 2011, Florida and New York continue to have loss ratios higher than the countrywide average, but the results in these two key states have improved for three straight quarters, reducing the pressure on countrywide results.
(2)	Measures and statistics presented for Allstate brand exclude the Company’s Canadian operations and specialty auto.
(3)	Refer to the Allstate Brand Domestic Operating Measures and Statistics table for descriptions of these measures.
(4)	Excluding Florida and New York (impacted by actions to improve profitability), new issued applications on a countrywide basis increased 2.4% to 422 thousand in the second quarter of 2011 from 412 thousand in the second quarter of 2010, and increased 9.3% to 871 thousand in the first six months of 2011 from 797 thousand in the first six months of 2010.
(5)	Net increases in insured cars by policy endorsement activity.
(6)	Average gross premium decreased in the second quarter and first six months of 2011 compared the same periods of 2010 primarily due to rate decreases taken from the second half of 2010 through the first quarter of 2011 to improve competitive position, as well as customer electing lower coverage levels on their policies.

17

THE ALLSTATE CORPORATION

NON-STANDARD AUTO PROFITABILITY MEASURES

		Three months ended																		Six months ended
		June 30,			March 31,			Dec. 31,			Sept. 30,			June 30,			March 31,			June 30,			June 30,
		2011			2011			2010			2010			2010			2010			2011			2010
Non-standard auto
($ in millions)
Net premiums written
Allstate brand	$	197		$	210		$	203		$	223		$	220		$	237		$	407		$	457
Encompass brand		-			1			1			1			1			3			1			4
		197			211			204			224			221			240			408			461
Net premiums earned
Allstate brand	$	205		$	210		$	216		$	222		$	228		$	230		$	415		$	458
Encompass brand		1			1			1			2			2			4			2			6
		206			211			217			224			230			234			417			464
Incurred losses
Allstate brand	$	142		$	136		$	150		$	137		$	157		$	158		$	278		$	315
Encompass brand		1			1			1			2			2			4			2			6
		143			137			151			139			159			162			280			321
Expenses
Allstate brand	$	48		$	48		$	38		$	61		$	60		$	56		$	96		$	116
Encompass brand		-			1			2			1			1			1			1			2
		48			49			40			62			61			57			97			118
Underwriting Income
Allstate brand	$	15		$	26		$	28		$	24		$	11		$	16		$	41		$	27
Encompass brand		-			(1	)		(2	)		(1	)		(1	)		(1	)		(1	)		(2	)
		15			25			26			23			10			15			40			25
Loss ratio
Allstate brand		69.3			64.8			69.4			61.7			68.9			68.7			67.0			68.8
Encompass brand		100.0			100.0			100.0			100.0			100.0			100.0			100.0			100.0
Allstate Protection		69.4			64.9			69.6			62.0			69.2			69.2			67.1			69.2
Expense ratio
Allstate brand		23.4			22.8			17.6			27.5			26.3			24.3			23.1			25.3
Encompass brand		-			100.0			200.0			50.0			50.0			25.0			50.0			33.3
Allstate Protection		23.3			23.3			18.4			27.7			26.5			24.4			23.3			25.4
Combined ratio
Allstate brand		92.7			87.6			87.0			89.2			95.2			93.0			90.1			94.1
Encompass brand		100.0			200.0			300.0			150.0			150.0			125.0			150.0			133.3
Allstate Protection		92.7			88.2			88.0			89.7			95.7			93.6			90.4			94.6
Effect of catastrophe losses on loss ratio
Allstate brand		3.9			-			0.5			-			0.4			0.4			1.9			0.4
Encompass brand		-			-			-			-			-			-			-			-
Allstate brand non-standard auto domestic operating measures (1)
		June 30,			March 31,			Dec. 31,			Sept. 30,			June 30,			March 31,			June 30,			June 30,
		2011			2011			2010			2010			2010			2010			2011			2010
Operating measures (2)
Policies in force (in thousands)		599			627			640			671			706			724			599			706
New issued applications (in thousands)		59			78			63			70			77			99			137			176
Average premium - gross written ($)		620			621			627			630			619			619			620			619
Average premium - net earned ($)		573			579			576			571			573			571			576			572
Renewal ratio (%)		70.8			70.4			70.5			70.8			72.5			71.8			70.6			72.1
Loss trends
(% change year-over-year)
Bodily injury claim frequency		(2.4	)		2.3			8.1			7.1			1.4			6.6			(0.1	)		3.9
Property damage claim frequency		(1.8	)		0.5			0.3			3.3			0.8			3.1			(0.6	)		1.9

(1)	Measures and statistics presented for Allstate brand exclude the Company’s Canadian operations and specialty auto.
(2)	Refer to the Allstate Brand Domestic Operating Measures and Statistics page for descriptions of these measures.

18

THE ALLSTATE CORPORATION

AUTO PROFITABILITY MEASURES

		Three months ended													Six months ended
			June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,		June 30,		June 30,
			2011		2011		2010		2010		2010		2010		2011		2010
Auto
($ in millions)
Net premiums written
Allstate brand		$	4,108	$	4,194	$	4,046	$	4,251	$	4,168	$	4,260	$	8,302	$	8,428
Encompass brand			154		145		150		167		170		163		299		333
			4,262		4,339		4,196		4,418		4,338		4,423		8,601		8,761
Net premiums earned
Allstate brand		$	4,143	$	4,138	$	4,157	$	4,183	$	4,197	$	4,173	$	8,281	$	8,370
Encompass brand			156		161		165		175		187		198		317		385
			4,299		4,299		4,322		4,358		4,384		4,371		8,598		8,755
Incurred losses
Allstate brand		$	3,024	$	2,896	$	3,091	$	2,860	$	2,940	$	2,897	$	5,920	$	5,837
Encompass brand			123		122		126		133		137		153		245		290
			3,147		3,018		3,217		2,993		3,077		3,050		6,165		6,127
Expenses
Allstate brand		$	1,034	$	1,022	$	1,028	$	1,031	$	1,029	$	1,041	$	2,056	$	2,070
Encompass brand			44		46		47		53		51		52		90		103
			1,078		1,068		1,075		1,084		1,080		1,093		2,146		2,173
Underwriting Income
Allstate brand		$	85	$	220	$	38	$	292	$	228	$	235	$	305	$	463
Encompass brand			(11)		(7)		(8)		(11)		(1)		(7)		(18)		(8)
			74		213		30		281		227		228		287		455
Loss ratio
Allstate brand			73.0		70.0		74.4		68.4		70.1		69.4		71.5		69.8
Encompass brand			78.9		75.8		76.3		76.0		73.2		77.3		77.3		75.3
Allstate Protection			73.2		70.2		74.5		68.7		70.2		69.8		71.7		70.0
Expense ratio
Allstate brand			24.9		24.7		24.7		24.6		24.5		25.0		24.8		24.7
Encompass brand			28.2		28.5		28.5		30.3		27.3		26.2		28.4		26.8
Allstate Protection			25.1		24.8		24.8		24.9		24.6		25.0		25.0		24.8
Combined ratio
Allstate brand			97.9		94.7		99.1		93.0		94.6		94.4		96.3		94.5
Encompass brand			107.1		104.3		104.8		106.3		100.5		103.5		105.7		102.1
Allstate Protection			98.3		95.0		99.3		93.6		94.8		94.8		96.7		94.8
Effect of catastrophe losses on loss ratio
Allstate brand			6.6		0.4		0.8		0.4		1.9		0.7		3.5		1.3
Encompass brand			3.2		-		1.2		0.6		0.5		1.0		1.6		0.8
Effect of pre-tax reserve reestimates on combined ratio*
Allstate brand			(2.1)		(0.6)		(1.2)		(0.9)		(2.1)		(0.1)		(1.4)		(1.1)
Encompass brand			(0.6)		3.1		(6.1)		(1.7)		1.6		5.1		1.3		3.4
Allstate brand auto domestic operating measures (1)
			June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,		June 30,		June 30,
			2011		2011		2010		2010		2010		2010		2011		2010
Operating measures (2)
Policies in force (in thousands)			18,019		18,083		18,124		18,150		18,235		18,305		18,019		18,235
New issued applications (in thousands)			531		597		589		607		575		563		1,128		1,138
Average premium - gross written ($)			448		446		449		449		452		451		447		451
Average premium - net earned ($)			434		435		438		437		439		436		435		437
Renewal ratio (%)			88.5		88.1		88.0		87.9		88.3		88.0		88.3		88.2
Loss trends
(% change year-over-year)
Bodily injury claim frequency			(2.7)		2.7		7.5		7.3		3.9		5.4		(0.1)		4.6
Property damage claim frequency			(4.0)		0.9		2.2		3.6		1.8		-		(1.6)		0.9
Paid severity - bodily injury			0.4		3.6		(0.2)		1.1		(1.0)		(1.3)		2.0		(1.1)
Paid severity - property damage			1.1		0.8		(1.7)		1.0		(1.5)		0.4		1.0		(0.5)
(1)	Measures and statistics presented for Allstate brand exclude the Company’s Canadian operations and specialty auto.
(2)	Refer to the Allstate Brand Domestic Operating Measures and Statistics page for descriptions of these measures.

19

THE ALLSTATE CORPORATION

HOMEOWNERS PROFITABILITY MEASURES

	Three months ended													Six months ended
		June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,		June 30,		June 30,
		2011		2011		2010		2010		2010		2010		2011		2010
Homeowners
($ in millions)
Net premiums written
Allstate brand	$	1,606	$	1,225	$	1,389	$	1,610	$	1,565	$	1,189	$	2,831	$	2,754
Encompass brand		94		79		85		98		94		80		173		174
		1,700		1,304		1,474		1,708		1,659		1,269		3,004		2,928
Net premiums earned
Allstate brand	$	1,457	$	1,448	$	1,431	$	1,430	$	1,416	$	1,416	$	2,905	$	2,832
Encompass brand		91		91		93		96		96		100		182		196
		1,548		1,539		1,524		1,526		1,512		1,516		3,087		3,028
Incurred losses
Allstate brand	$	2,493	$	983	$	1,113	$	1,151	$	1,169	$	1,239	$	3,476	$	2,408
Encompass brand		98		60		60		61		62		103		158		165
		2,591		1,043		1,173		1,212		1,231		1,342		3,634		2,573
Expenses
Allstate brand	$	325	$	341	$	346	$	346	$	309	$	337	$	666	$	646
Encompass brand		29		28		28		31		29		29		57		58
		354		369		374		377		338		366		723		704
Underwriting Income
Allstate brand	$	(1,361)	$	124	$	(28)	$	(67)	$	(62)	$	(160)	$	(1,237)	$	(222)
Encompass brand		(36)		3		5		4		5		(32)		(33)		(27)
		(1,397)		127		(23)		(63)		(57)		(192)		(1,270)		(249)
Loss ratio
Allstate brand		171.1		67.9		77.8		80.5		82.6		87.5		119.7		85.0
Encompass brand		107.7		65.9		64.5		63.5		64.6		103.0		86.8		84.2
Allstate Protection		167.4		67.7		77.0		79.4		81.4		88.5		117.7		85.0
Expense ratio
Allstate brand		22.3		23.5		24.2		24.2		21.8		23.8		22.9		22.8
Encompass brand		31.9		30.8		30.1		32.3		30.2		29.0		31.3		29.6
Allstate Protection		22.8		24.0		24.5		24.7		22.4		24.2		23.4		23.2
Combined ratio
Allstate brand		193.4		91.4		102.0		104.7		104.4		111.3		142.6		107.8
Encompass brand		139.6		96.7		94.6		95.8		94.8		132.0		118.1		113.8
Allstate Protection		190.2		91.7		101.5		104.1		103.8		112.7		141.1		108.2
Effect of catastrophe losses on loss ratio
Allstate brand		123.2		17.7		30.3		23.1		34.7		37.1		70.6		35.9
Encompass brand		61.5		16.5		16.1		13.5		15.6		46.0		39.0		31.1
Effect of pre-tax reserve reestimates on combined ratio
Allstate brand		0.3		(2.7)		(1.8)		5.2		(4.2)		(0.4)		(1.2)		(2.3)
Encompass brand		(1.1)		1.1		5.4		(7.3)		(1.0)		(2.0)		-		(1.5)
Allstate brand homeowners domestic operating measures (1)
		June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,		June 30,		June 30,
		2011		2011		2010		2010		2010		2010		2011		2010
Operating measures (2)
Policies in force (in thousands)		6,555		6,631		6,690		6,740		6,821		6,886		6,555		6,821
New issued applications (in thousands)		123		114		126		140		151		119		237		270
Average premium - gross written ($)		989		975		963		953		933		921		983		927
Average premium - net earned ($)		856		844		825		821		803		795		850		799
Renewal ratio (%)		88.4		88.3		88.5		88.6		88.3		88.0		88.3		88.2
Loss trends
(% change year-over-year)
Claim frequency excluding catastrophe losses		(0.8)		1.7		(8.5)		(2.3)		1.7		5.1		0.4		3.3
Claim severity excluding catastrophe losses		3.4		3.5		8.0		2.1		(0.7)		(2.1)		3.5		(0.1)

(1)	Measures presented for Allstate brand exclude the Company’s Canadian operations.
(2)	Refer to the Allstate Brand Domestic Operating Measures and Statistics page for descriptions of these measures.

20

THE ALLSTATE CORPORATION

PROPERTY-LIABILITY

ALLSTATE BRAND DOMESTIC OPERATING MEASURES AND STATISTICS (1)

	Three months ended
		June 30,	March 31,	Dec. 31,	Sept. 30,	June 30,	March 31,
		2011	2011	2010	2010	2010	2010
Policies in Force (2)
(in thousands)
Standard auto		17,420	17,456	17,484	17,479	17,529	17,581
Non-standard auto		599	627	640	671	706	724
Auto		18,019	18,083	18,124	18,150	18,235	18,305
Homeowners		6,555	6,631	6,690	6,740	6,821	6,886
New Issued Applications (3)
(in thousands)
Standard auto		472	519	526	537	498	464
Non-standard auto		59	78	63	70	77	99
Auto		531	597	589	607	575	563
Homeowners		123	114	126	140	151	119
Average Premium - Gross Written ($) (4)
Standard auto		442	439	442	441	444	443
Non-standard auto		620	621	627	630	619	619
Auto		448	446	449	449	452	451
Homeowners		989	975	963	953	933	921
Average Premium - Net Earned ($) (5)
Standard auto		429	430	433	432	433	430
Non-standard auto		573	579	576	571	573	571
Auto		434	435	438	437	439	436
Homeowners		856	844	825	821	803	795
Renewal Ratio (%) (6)
Standard auto		89.2	88.9	88.4	88.7	89.0	88.8
Non-standard auto		70.8	70.4	70.5	70.8	72.5	71.8
Auto		88.5	88.1	88.0	87.9	88.3	88.0
Homeowners		88.4	88.3	88.5	88.6	88.3	88.0
Bodily Injury Claim Frequency
(% change year-over-year)
Standard auto		(2.3)	3.1	7.7	7.5	4.2	5.4
Non-standard auto		(2.4)	2.3	8.1	7.1	1.4	6.6
Auto		(2.7)	2.7	7.5	7.3	3.9	5.4
Property Damage Claim Frequency
(% change year-over-year)
Standard auto		(3.9)	1.2	2.4	3.7	1.9	(0.1)
Non-standard auto		(1.8)	0.5	0.3	3.3	0.8	3.1
Auto		(4.0)	0.9	2.2	3.6	1.8	-
Auto Paid Severity
(% change year-over-year)
Bodily injury		0.4	3.6	(0.2)	1.1	(1.0)	(1.3)
Property damage		1.1	0.8	(1.7)	1.0	(1.5)	0.4
Homeowners Excluding Catastrophe Losses
(% change year-over-year)
Claim frequency		(0.8)	1.7	(8.5)	(2.3)	1.7	5.1
Claim severity		3.4	3.5	8.0	2.1	(0.7)	(2.1)

(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.

21

THE ALLSTATE CORPORATION

HOMEOWNERS SUPPLEMENTAL INFORMATION

($ in millions)

		Six months ended June 30, 2011
												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	$	48	$	45	93.8%	$	7	14.6%
Other hurricane exposure states		1,582		2,069	130.8%		1,319	83.4%
Total hurricane exposure states  (2)		1,630		2,114	129.7%		1,326	81.3%				13	8.8%
Other catastrophe exposure states		1,457		1,520	104.3%		797	54.7%				18	6.5%
Total	$	3,087	$	3,634	117.7%	$	2,123	68.8%		49		31	7.9%
										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 2011.  The premiums and losses are presented on a GAAP basis with adjustments as indicated in Notes 3 and 4.  Each state in which the Company writes business has been categorized into one of two exposure groupings (Hurricane or Other).   Hurricane exposure states are comprised of those states in which hurricanes are the primary catastrophe exposure. However, the catastrophe losses for these states include losses due to other kinds of catastrophes.  A catastrophe is defined by Allstate as an event that produces pre-tax losses before reinsurance in excess of $1 million, and involves multiple first party policyholders, or an event that produces a number of claims in excess of a preset per-event threshold of average claims in a specific area, occurring within a certain amount of time following the event.

(2) Hurricane Exposure States

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

(3) Incurred Losses

Incurred losses (which include catastrophe losses) and Catastrophe losses, exclude the effects of those events for which the exposure is now covered, at least in part, by permanent industry reinsurance or insurance mechanism (i.e., Florida Hurricane Catastrophe Fund (“FHCF”), California Earthquake Authority) or with Hawaii hurricanes, coverage is being brokered to a non-affiliated insurance company.  Mechanisms such as the FHCF and external reinsurance are available and are reflected in our capital structure and help mitigate exposure to these types of events.   For the period 1992 - 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.

22

THE ALLSTATE CORPORATION

PROPERTY-LIABILITY

EFFECT OF CATASTROPHE LOSSES ON THE COMBINED RATIO

($ in millions, except ratios)

										Excludes the effect of
										catastrophe losses relating to
										earthquakes and hurricanes
	Effect of all catastrophe losses on the Property-Liability					Premiums		Total		Total		Effect on the
	combined ratio					earned		catastrophe		catastrophe		Property-Liability
	Quarter 1	Quarter 2	Quarter 3	Quarter 4	Year	year-to-date		losses by year		losses by year		combined ratio
1992 (3)	3.2	7.1	48.7	25.5	21.2	$	15,542	$	3,301	$	680	4.4
1993 (3)	5.8	3.0	1.2	3.8	3.4	16,039		547		607		3.8
1994 (3)	27.4	4.4	9.5	7.3	12.0	16,513		1,989		529		3.2
1995	4.0	7.8	3.8	5.0	5.2	17,540		905		683		3.9
1996	5.1	6.0	6.4	3.8	5.4	18,366		983		837		4.6
1997	2.4	2.6	2.6	0.3	2.0	18,604		365		325		1.7
1998	2.5	6.3	3.9	3.4	4.0	19,307		780		615		3.2
1999	2.6	5.6	5.4	2.7	4.1	20,112		816		623		3.1
2000	7.0	6.7	1.7	2.3	4.4	21,871		967		930		4.3
2001	1.5	9.8	2.5	2.4	4.0	22,197		894		763		3.4
2002	1.9	5.0	1.6	4.0	3.1	23,361		731		638		2.7
2003	2.2	9.2	6.1	6.5	6.0	24,677		1,489		1,256		5.1
2004	1.6	3.8	26.0	6.2	9.5	25,989		2,468		467		1.8
2005	2.5	2.2	69.4	9.6	21.0	27,039		5,674		460		1.7
2006	1.6	3.7	2.5	4.1	3.0	27,369		810		1,044		3.8
2007	2.4	6.3	5.0	7.0	5.2	27,233		1,409		1,336		4.9
2008	8.4	10.3	26.8	3.9	12.4	26,967		3,342		1,876		7.0
2009	7.8	12.5	6.2	5.0	7.9	26,194		2,069		2,159		8.2
2010	10.0	9.8	5.9	8.3	8.5	25,957		2,207		2,272		8.8
2011	5.2	36.2	-	-	20.7	12,905		2,672		2,673		20.7
Average (2)	5.0	8.3	12.9	5.7	7.9							4.8
	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
2011	5.2	36.2	-	-	20.7	12,905		2,672
Average (2)	4.1	8.2	10.8	4.5	6.9

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

23

THE ALLSTATE CORPORATION

ALLSTATE PROTECTION HISTORICAL CATASTROPHE BY SIZE OF EVENT

($ in millions, except ratios)

Three months ended June 30, 2011
											Average
		Number				Claim and			Combined		catastrophe
Size of catastrophe		of events				claim expense			ratio impact		loss per event
Greater than $250 million		3	9.1	%	$	1,172	50.1	%	18.1	$	391
$101 million to $250 million		3	9.1			470	20.1		7.3		157
$50 million to $100 million		6	18.2			443	18.9		6.9		74
Less than $50 million		21	63.6			250	10.7		3.9		12
Total		33	100.0	%		2,335	99.8		36.2		71
Prior year reserve reestimates						(17)	(0.7)		(0.3)
Prior quarter reserve reestimates						21	0.9		0.3
Total catastrophe losses					$	2,339	100.0	%	36.2
Six months ended June 30, 2011
											Average
		Number				Claim and			Combined		catastrophe
Size of catastrophe		of events				claim expense			ratio impact		loss per event
Greater than $250 million		3	6.1	%	$	1,172	43.8	%	9.1	$	391
$101 million to $250 million		3	6.1			470	17.6		3.6		157
$50 million to $100 million		8	16.3			609	22.8		4.7		76
Less than $50 million		35	71.5			472	17.7		3.7		13
Total		49	100.0	%		2,723	101.9		21.1		56
Prior year reserve reestimates						(51)	(1.9)		(0.4)
Total catastrophe losses					$	2,672	100.0	%	20.7
1995 through June 30, 2011
	Principal										Average
	state with	Number				Claim and			Combined		catastrophe
Size of catastrophe	loss	of events				claim expense			ratio impact		loss per event
Greater than $250 million
Hurricane Katrina - 2005	LA				$	3,592	12.6	%	0.9	$	3,592
Hurricane Rita - 2005	TX					891	3.1		0.2		891
Hurricane Ike - 2008	TX					863	3.0		0.2		863
Hurricane Ivan - 2004	FL					632	2.2		0.2		632
Hurricane Charley - 2004	FL					604	2.1		0.2		604
Hurricane Frances - 2004	FL					550	1.9		0.1		550
May 2011 Tornados	TX, OH, MO					547	1.9		0.1		547
Hurricane Wilma - 2005	FL					544	1.9		0.1		544
April 27th 2011 Tornados	AL					358	1.3		0.1		358
Arizona Hail - 2010	AZ					355	1.3		0.1		355
Hurricane Jeanne - 2004	FL					335	1.2		0.1		335
October 2003 Fires	CA					300	1.1		0.1		300
Hurricane Gustav - 2008	LA					271	0.9		0.1		271
April 24th 2011 Tornados	TN					267	0.9		0.1		267
Greater than $250 million		14	1.2	%		10,109	35.4		2.6		722
$101 million to $250 million		23	2.0			3,525	12.3		0.9		153
$50 million to $100 million		61	5.4			4,314	15.1		1.1		71
Less than $50 million		1,035	91.4			10,633	37.2		2.8		10
Total		1,133	100.0	%	$	28,581	100.0	%	7.4		25

24

THE ALLSTATE CORPORATION

PROPERTY-LIABILITY

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

($ in millions, except ratios)

	Three months ended													Six months ended
		June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,		June 30,		June 30,
		2011		2011		2010		2010		2010		2010		2011		2010
Pre-tax Reserve Reestimates (1)
Auto	$	(90)	$	(19)	$	(59)	$	(40)	$	(85)	$	5	$	(109)	$	(80)
Homeowners		3		(38)		(21)		67		(61)		(8)		(35)		(69)
Other personal lines		36		13		80		(38)		(5)		(22)		49		(27)
Allstate Protection (2)		(51)		(44)		-		(11)		(151)		(25)		(95)		(176)
Discontinued Lines and Coverages		4		3		3		22		1		2		7		3
Property-Liability	$	(47)	$	(41)	$	3	$	11	$	(150)	$	(23)	$	(88)	$	(173)
Allstate brand	$	(49)	$	(48)	$	5	$	-	$	(152)	$	(34)	$	(97)	$	(186)
Encompass brand		(2)		4		(5)		(11)		1		9		2		10
Allstate Protection (2)	$	(51)	$	(44)	$	-	$	(11)	$	(151)	$	(25)	$	(95)	$	(176)
Effect of Pre-tax Reserve Reestimates on Combined Ratio (1)
Auto		(1.4)		(0.3)		(0.9)		(0.6)		(1.3)		0.1		(0.8)		(0.6)
Homeowners		-		(0.6)		(0.3)		1.0		(0.9)		(0.1)		(0.3)		(0.6)
Other personal lines		0.6		0.2		1.2		(0.6)		(0.1)		(0.4)		0.4		(0.2)
Allstate Protection (2)		(0.8)		(0.7)		-		(0.2)		(2.3)		(0.4)		(0.7)		(1.4)
Discontinued Lines and Coverages		0.1		-		0.1		0.4		-		-		-		0.1
Property-Liability		(0.7)		(0.7)		0.1		0.2		(2.3)		(0.4)		(0.7)		(1.3)
Allstate brand		(0.8)		(0.8)		0.1		-		(2.3)		(0.5)		(0.7)		(1.5)
Encompass brand		-		0.1		(0.1)		(0.2)		-		0.1		-		0.1
Allstate Protection (2)		(0.8)		(0.7)		-		(0.2)		(2.3)		(0.4)		(0.7)		(1.4)

(1)	Favorable reserve reestimates are shown in parentheses.
(2)	Favorable reserve reestimates included in catastrophe losses totaled $17 million and $83 million in the three months ended June 30, 2011 and 2010, respectively. Favorable reserve reestimates included in catastrophe losses totaled $51 million and $98 million in the six months ended June 30, 2011 and 2010, respectively.

25

THE ALLSTATE CORPORATION

ASBESTOS AND ENVIRONMENTAL RESERVES

($ in millions)

		Three months ended				Twelve months ended December 31,
		June 30,		March 31,
		2011		2011		2010		2009		2008		2007		2006
(net of reinsurance)
Asbestos claims
Beginning reserves	$	1,091	$	1,100	$	1,180	$	1,228	$	1,302	$	1,375	$	1,373
Incurred claims and claims expense		-		-		5		(8)		8		17		86
Claims and claims expense paid		1		(9)		(85)		(40)		(82)		(90)		(84)
Ending reserves	$	1,092	$	1,091	$	1,100	$	1,180	$	1,228	$	1,302	$	1,375
Claims and claims expense paid as a percent of ending reserves		(0.1)%		0.8%		7.7%		3.4%		6.7%		6.9%		6.1%
Environmental claims
Beginning reserves	$	193	$	201	$	198	$	195	$	232	$	194	$	205
Incurred claims and claims expense		-		-		18		13		-		63		10
Claims and claims expense paid		(1)		(8)		(15)		(10)		(37)		(25)		(21)
Ending reserves	$	192	$	193	$	201	$	198	$	195	$	232	$	194
Claims and claims expense paid as a percent of ending reserves		0.5%		4.1%		7.5%		5.1%		19.0%		10.8%		10.8%

26

THE ALLSTATE CORPORATION

ALLSTATE FINANCIAL RESULTS

($ in millions)

	Three months ended													Six months ended
		June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,		June 30,		June 30,
		2011		2011		2010		2010		2010		2010		2011		2010
Investments	$	59,659	$	60,484	$	61,582	$	62,915	$	61,804	$	62,336	$	59,659	$	61,804
Premiums	$	286	$	312	$	273	$	290	$	286	$	289	$	598	$	575
Contract charges		261		257		258		258		259		255		518		514
Net investment income		694		684		692		707		723		731		1,378		1,454
Periodic settlements and accruals on non-hedge derivative instruments		19		17		13		10		11		17		36		28
Contract benefits		(422)		(454)		(443)		(445)		(485)		(442)		(876)		(927)
Interest credited to contractholder funds		(412)		(425)		(439)		(446)		(450)		(463)		(837)		(913)
Amortization of deferred policy acquisition costs		(103)		(113)		(86)		(101)		(41)		(58)		(216)		(99)
Operating costs and expenses		(110)		(109)		(115)		(118)		(116)		(120)		(219)		(236)
Restructuring and related charges		-		2		2		-		1		-		2		1
Income tax expense on operations		(72)		(55)		(51)		(47)		(63)		(70)		(127)		(133)
Operating income		141		116		104		108		125		139		257		264
Realized capital gains and losses, after-tax		40		25		23		(25)		(230)		(105)		65		(335)
Valuation changes on embedded derivatives that are not hedged, after-tax		(3)		8		-		-		-		-		5		-
DAC and DSI (amortization) accretion relating to realized capital gains and losses and valuation changes on embedded derivatives that are not hedged, after-tax		(5)		(26)		(43)		7		4		(2)		(31)		2
DAC and DSI unlocking relating to realized capital gains and losses, after-tax		-		1		-		-		-		(18)		1		(18)
Reclassification of periodic settlements and accruals on non-hedge derivative instruments, after-tax		(11)		(12)		(8)		(7)		(7)		(11)		(23)		(18)
Gain (loss) on disposition of operations, after-tax		4		(15)		-		2		1		1		(11)		2
Net income (loss)	$	166	$	97	$	76	$	85	$	(107)	$	4	$	263	$	(103)

27

THE ALLSTATE CORPORATION

ALLSTATE FINANCIAL PREMIUMS AND CONTRACT CHARGES

($ in millions)

	Three months ended													Six months ended
		June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,		June 30,		June 30,
		2011		2011		2010		2010		2010		2010		2011		2010
PREMIUMS AND CONTRACT CHARGES - BY PRODUCT
Underwritten Products
Traditional life insurance premiums	$	109	$	108	$	103	$	107	$	104	$	106	$	217	$	210
Accident and health insurance premiums		162		161		157		157		151		156		323		307
Interest-sensitive life insurance contract charges		253		248		251		249		249		242		501		491
		524		517		511		513		504		504		1,041		1,008
Annuities
Immediate annuities with life contingencies premiums		15		43		13		26		31		27		58		58
Other fixed annuity contract charges		8		9		7		9		10		13		17		23
		23		52		20		35		41		40		75		81
Total	$	547	$	569	$	531	$	548	$	545	$	544	$	1,116	$	1,089
PREMIUMS AND CONTRACT CHARGES - BY DISTRIBUTION CHANNEL
Allstate agencies	$	256	$	251	$	253	$	247	$	247	$	246	$	507	$	493
Workplace enrolling agents		169		168		166		166		161		161		337		322
Other		122		150		112		135		137		137		272		274
Total	$	547	$	569	$	531	$	548	$	545	$	544	$	1,116	$	1,089

28

THE ALLSTATE CORPORATION

CHANGE IN CONTRACTHOLDER FUNDS

($ in millions)

	Three months ended																			Six months ended
		June 30,			March 31,			Dec. 31,			Sept. 30,			June 30,			March 31,			June 30,			June 30,
		2011			2011			2010			2010			2010			2010			2011			2010
Beginning balance	$	46,834		$	48,195		$	48,936		$	49,443		$	51,027		$	52,582		$	48,195		$	52,582
Deposits
Fixed annuities		142			164			180			224			237			291			306			528
Interest-sensitive life insurance		316			329			363			363			391			395			645			786
Bank and other deposits		97			213			246			262			234			252			310			486
Total deposits		555			706			789			849			862			938			1,261			1,800
Interest credited		413			410			439			445			448			462			823			910
Maturities, benefits, withdrawals and other adjustments
Maturities and retirements of institutional products		(306	)		(487	)		(49	)		(3	)		(827	)		(954	)		(793	)		(1,781	)
Benefits		(367	)		(372	)		(365	)		(397	)		(395	)		(395	)		(739	)		(790	)
Surrenders and partial withdrawals		(1,723	)		(1,293	)		(1,305	)		(1,295	)		(1,355	)		(1,248	)		(3,016	)		(2,603	)
Contract charges		(255	)		(251	)		(252	)		(247	)		(243	)		(241	)		(506	)		(484	)
Net transfers from separate accounts		3			3			3			3			3			2			6			5
Fair value hedge adjustments for institutional products		-			(34	)		(23	)		24			(74	)		(123	)		(34	)		(197	)
Other adjustments		(76	)		(43	)		22			114			(3	)		4			(119	)		1
Total maturities, benefits, withdrawals and other adjustments		(2,724	)		(2,477	)		(1,969	)		(1,801	)		(2,894	)		(2,955	)		(5,201	)		(5,849	)
Ending balance	$	45,078		$	46,834		$	48,195		$	48,936		$	49,443		$	51,027		$	45,078		$	49,443

29

THE ALLSTATE CORPORATION

ALLSTATE FINANCIAL ANALYSIS OF NET INCOME

($ in millions)

	Three months ended																			Six months ended
		June 30,			March 31,			Dec. 31,			Sept. 30,			June 30,			March 31,			June 30,			June 30,
		2011			2011			2010			2010			2010			2010			2011			2010
Benefit spread
Premiums	$	286		$	312		$	273		$	290		$	286		$	289		$	598		$	575
Cost of insurance contract charges (1)		162			162			161			161			159			156			324			315
Contract benefits excluding the implied interest on immediate annuities with life contingencies (2)		(287	)		(319	)		(307	)		(310	)		(346	)		(303	)		(606	)		(649	)
Total benefit spread		161			155			127			141			99			142			316			241
Investment spread
Net investment income		694			684			692			707			723			731			1,378			1,454
Implied interest on immediate annuities with life contingencies (2)		(135	)		(135	)		(136	)		(135	)		(139	)		(139	)		(270	)		(278	)
Interest credited to contractholder funds		(417	)		(418	)		(449	)		(445	)		(450	)		(463	)		(835	)		(913	)
Total investment spread		142			131			107			127			134			129			273			263
Surrender charges and contract maintenance expense fees (1)		99			95			97			97			100			99			194			199
Realized capital gains and losses		62			39			36			(38	)		(353	)		(162	)		101			(515	)
Amortization of deferred policy acquisition costs		(110	)		(147	)		(141	)		(91	)		(35	)		(89	)		(257	)		(124	)
Operating costs and expenses		(110	)		(109	)		(115	)		(118	)		(116	)		(120	)		(219	)		(236	)
Restructuring and related charges		-			2			2			-			1			-			2			1
Gain (loss) on disposition of operations		6			(23	)		(1	)		4			2			1			(17	)		3
Income tax (expense) benefit on operations		(84	)		(46	)		(36	)		(37	)		61			4			(130	)		65
Net income (loss)	$	166		$	97		$	76		$	85		$	(107	)	$	4		$	263		$	(103	)
Benefit spread by product group
Life insurance	$	98		$	93		$	78		$	93		$	23		$	88		$	191		$	111
Accident and health insurance		71			74			63			65			60			64			145			124
Annuities		(8	)		(12	)		(14	)		(17	)		16			(10	)		(20	)		6
Total benefit spread	$	161		$	155		$	127		$	141		$	99		$	142		$	316		$	241
Investment spread by product group
Annuities and institutional products	$	51		$	48		$	31		$	44		$	54		$	50		$	99		$	104
Life insurance		14			11			11			11			6			7			25			13
Allstate Bank products		6			8			7			8			8			8			14			16
Accident and health insurance		5			5			5			5			4			4			10			8
Net investment income on investments supporting capital		66			59			53			59			62			60			125			122
Total investment spread	$	142		$	131		$	107		$	127		$	134		$	129		$	273		$	263
(1) Reconciliation of contract charges
Cost of insurance contract charges	$	162		$	162		$	161		$	161		$	159		$	156		$	324		$	315
Surrender charges and contract maintenance expense fees		99			95			97			97			100			99			194			199
Total contract charges	$	261		$	257		$	258		$	258		$	259		$	255		$	518		$	514
(2) Reconciliation of contract benefits
Contract benefits excluding the implied interest on immediate annuities with life contingencies	$	(287	)	$	(319	)	$	(307	)	$	(310	)	$	(346	)	$	(303	)	$	(606	)	$	(649	)
Implied interest on immediate annuities with life contingencies		(135	)		(135	)		(136	)		(135	)		(139	)		(139	)		(270	)		(278	)
Total contract benefits	$	(422	)	$	(454	)	$	(443	)	$	(445	)	$	(485	)	$	(442	)	$	(876	)	$	(927	)

30

THE ALLSTATE CORPORATION

ALLSTATE FINANCIAL WEIGHTED AVERAGE INVESTMENT SPREADS

	Three months ended June 30, 2011						Three months ended June 30, 2010
	Weighted average		Weighted average		Weighted average		Weighted average		Weighted average		Weighted average
	investment yield		interest crediting rate		investment spreads		investment yield		interest crediting rate		investment spreads
Interest-sensitive life insurance	5.5	%	4.2	%	1.3	%	5.5	%	4.4	%	1.1	%
Deferred fixed annuities and institutional products	4.6		3.3		1.3		4.5		3.2		1.3
Immediate fixed annuities with and without life contingencies	6.4		6.3		0.1		6.5		6.4		0.1
Investments supporting capital, traditional life and other products	3.8		n/a		n/a		3.7		n/a		n/a
	Six months ended June 30, 2011						Six months ended June 30, 2010
	Weighted average		Weighted average		Weighted average		Weighted average		Weighted average		Weighted average
	investment yield		interest crediting rate		investment spreads		investment yield		interest crediting rate		investment spreads
Interest-sensitive life insurance	5.5	%	4.2	%	1.3	%	5.5	%	4.4	%	1.1	%
Deferred fixed annuities and institutional products	4.6		3.3		1.3		4.5		3.2		1.3
Immediate fixed annuities with and without life contingencies	6.3		6.3		-		6.5		6.4		0.1
Investments supporting capital, traditional life and other products	3.7		n/a		n/a		3.7		n/a		n/a

31

THE ALLSTATE CORPORATION

CORPORATE AND OTHER RESULTS

($ in millions)

	Three months ended																			Six months ended
		June 30,			March 31,			Dec. 31,			Sept. 30,			June 30,			March 31,			June 30,			June 30,
		2011			2011			2010			2010			2010			2010			2011			2010
Net investment income	$	16		$	14		$	15		$	14		$	16		$	15		$	30		$	31
Operating costs and expenses		(98	)		(91	)		(86	)		(95	)		(101	)		(97	)		(189	)		(198	)
Income tax benefit on operations		32			31			32			31			33			32			63			65
Operating loss		(50	)		(46	)		(39	)		(50	)		(52	)		(50	)		(96	)		(102	)
Realized capital gains and losses, after-tax		2			-			(1	)		1			5			2			2			7
Net loss	$	(48	)	$	(46	)	$	(40	)	$	(49	)	$	(47	)	$	(48	)	$	(94	)	$	(95	)

32

THE ALLSTATE CORPORATION

INVESTMENTS

($ in millions)

	PROPERTY-LIABILITY										ALLSTATE FINANCIAL
		June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,
		2011		2011		2010		2010		2010		2011		2011		2010		2010		2010
Fixed income securities, at fair value:
Tax-exempt	$	8,778	$	8,942	$	9,394	$	10,287	$	12,067	$	40	$	61	$	62	$	63	$	64
Taxable		18,726		19,126		18,019		19,135		17,089		47,821		49,117		49,872		51,477		50,483
Equity securities, at fair value		4,748		4,199		4,578		3,499		3,063		206		238		233		208		191
Mortgage loans		132		16		18		28		38		6,695		6,566		6,661		6,933		7,135
Limited partnership interests		2,913		2,684		2,506		2,289		2,014		1,449		1,358		1,274		1,128		1,067
Short-term, at fair value		770		473		430		454		655		1,342		874		1,297		1,038		947
Other		52		17		103		53		139		2,106		2,270		2,183		2,068		1,917
Total	$	36,119	$	35,457	$	35,048	$	35,745	$	35,065	$	59,659	$	60,484	$	61,582	$	62,915	$	61,804
Fixed income securities, at amortized cost:
Tax-exempt	$	8,650	$	8,981	$	9,399	$	9,900	$	11,804	$	39	$	59	$	59	$	59	$	60
Taxable		18,456		19,076		17,981		18,853		17,097		46,380		48,224		49,130		49,809		50,301
Ratio of fair value to amortized cost		101.5%		100.0%		100.1%		102.3%		100.9%		103.1%		101.9%		101.5%		103.4%		100.4%
Equity securities, at cost	$	4,170	$	3,616	$	4,043	$	3,266	$	3,175	$	159	$	176	$	185	$	181	$	181
Short-term, at amortized cost		770		473		430		454		655		1,342		874		1,297		1,038		947
	CORPORATE AND OTHER										CONSOLIDATED
		June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		June 30,		March 31,		Dec. 31,		Sept 30,		June 30,
		2011		2011		2010		2010		2010		2011		2011		2010		2010		2010
Fixed income securities, at fair value:
Tax-exempt	$	698	$	706	$	658	$	618	$	613	$	9,516	$	9,709	$	10,114	$	10,968	$	12,744
Taxable		2,351		2,290		1,607		1,613		1,609		68,898		70,533		69,498		72,225		69,181
Equity securities, at fair value		-		-		-		-		-		4,954		4,437		4,811		3,707		3,254
Mortgage loans		-		-		-		-		-		6,827		6,582		6,679		6,961		7,173
Limited partnership interests		38		35		36		37		38		4,400		4,077		3,816		3,454		3,119
Short-term, at fair value		424		639		1,552		1,284		812		2,536		1,986		3,279		2,776		2,414
Other		-		-		-		2		2		2,158		2,287		2,286		2,123		2,058
Total	$	3,511	$	3,670	$	3,853	$	3,554	$	3,074	$	99,289	$	99,611	$	100,483	$	102,214	$	99,943
Fixed income securities, at amortized cost:
Tax-exempt	$	670	$	684	$	637	$	585	$	582	$	9,359	$	9,724	$	10,095	$	10,544	$	12,446
Taxable		2,307		2,268		1,580		1,580		1,581		67,143		69,568		68,691		70,242		68,979
Ratio of fair value to amortized cost		102.4%		101.5%		102.2%		103.0%		102.7%		102.5%		101.2%		101.0%		103.0%		100.6%
Equity securities, at cost	$	-	$	-	$	-	$	-	$	-	$	4,329	$	3,792	$	4,228	$	3,447	$	3,356
Short-term, at amortized cost		424		639		1,552		1,284		812		2,536		1,986		3,279		2,776		2,414

33

THE ALLSTATE CORPORATION

UNREALIZED NET CAPITAL GAINS AND LOSSES ON SECURITY PORTFOLIO BY TYPE

($ in millions)

		June 30, 2011						March 31, 2011						December 31, 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	$	315		$	6,187	105.4	$	257		$	6,766	103.9	$	276		$	8,596	103.3
Municipal		116			14,673	100.8		(254	)		15,246	98.4		(267	)		15,934	98.4
Corporate		1,759			42,369	104.3		1,300			42,395	103.2		1,395			37,655	103.8
Foreign government		323			3,043	111.9		295			3,117	110.5		337			3,158	111.9
Residential mortgage-backed securities (“RMBS”)		(366	)		5,990	94.2		(377	)		6,530	94.5		(516	)		7,993	93.9
Commercial mortgage-backed securities (“CMBS”)		(97	)		1,986	95.3		(103	)		2,053	95.2		(219	)		1,994	90.1
Asset-backed securities (“ABS”)		(139	)		4,142	96.8		(169	)		4,111	96.1		(181	)		4,244	95.9
Redeemable preferred stock		1			24	104.3		1			24	104.3		1			38	102.7
Total fixed income securities		1,912			78,414	102.5		950			80,242	101.2		826			79,612	101.0
Equity securities		625			4,954	114.4		645			4,437	117.0		583			4,811	113.8
Short-term investments		-			2,536	100.0		-			1,986	100.0		-			3,279	100.0
Derivatives		(36	)		348	90.6		(30	)		512	94.5		(22	)		439	95.2
EMA limited partnership interests (2)		7			n/a	n/a		7			n/a	n/a		-			-	-
Unrealized net capital gains and losses, pre-tax	$	2,508		$	86,252	103.0	$	1,572		$	87,177	101.8	$	1,387		$	88,141	101.6
Amounts recognized for:
Insurance reserves (3)		(217	)					(2	)					(41	)
DAC and DSI (4)		(61	)					95						97
Amounts recognized		(278	)					93						56
Deferred income taxes		(784	)					(586	)					(508	)
Unrealized net capital gains and losses, after-tax	$	1,446					$	1,079					$	935
		September 30, 2010						June 30, 2010						March 31, 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	$	532		$	11,253	105.0	$	512		$	9,185	105.9	$	218		$	8,422	102.7
Municipal		402			16,768	102.5		89			18,849	100.5		(256	)		20,148	98.7
Corporate		2,334			37,204	106.7		1,445			35,935	104.2		914			34,499	102.7
Foreign government		482			3,428	116.4		350			3,252	112.1		306			3,314	110.2
RMBS		(693	)		8,499	92.5		(954	)		8,961	90.4		(1,231	)		9,112	88.1
CMBS		(382	)		1,993	83.9		(553	)		2,132	79.4		(768	)		2,452	76.1
ABS		(270	)		4,010	93.7		(390	)		3,572	90.2		(387	)		3,297	89.5
Redeemable preferred stock		2			38	105.6		1			39	102.6		2			40	105.3
Total fixed income securities		2,407			83,193	103.0		500			81,925	100.6		(1,202	)		81,284	98.5
Equity securities		260			3,707	107.5		(102	)		3,254	97.0		371			3,807	110.8
Short-term investments		-			2,776	100.0		-			2,414	100.0		-			2,482	100.0
Derivatives		(17	)		318	94.9		2			283	100.7		(18	)		437	96.0
Unrealized net capital gains and losses, pre-tax	$	2,650		$	89,994	103.0	$	400		$	87,876	100.5	$	(849	)	$	88,010	99.0
Amounts recognized for:
Insurance reserves (3)		(608	)					(292	)					-
DAC and DSI (4)		(49	)					403						726
Amounts recognized		(657	)					111						726
Deferred income taxes		(701	)					(183	)					39
Unrealized net capital gains and losses, after-tax	$	1,292					$	328					$	(84	)

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

34

THE ALLSTATE CORPORATION

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

($ in millions)

		As of June 30, 2011
											Amortized
											cost as a		Fair value
		Par		Amortized		Gross unrealized				Fair	percent of		as a percent
		value (1)		cost		Gains		Losses		value	par value (2)		of par value (2)
Corporate:
Banking	$	4,414	$	4,330	$	144	$	(90)	$	4,384	98.1	%	99.3	%
Utilities		6,732		6,754		475		(45)		7,184	100.3		106.7
Consumer goods (cyclical and non-cyclical)		7,296		7,407		329		(31)		7,705	101.5		105.6
Capital goods		4,751		4,765		275		(22)		5,018	100.3		105.6
Financial services		3,899		3,849		149		(21)		3,977	98.7		102.0
Transportation		1,883		1,901		110		(14)		1,997	101.0		106.1
Basic industry		2,019		2,036		104		(9)		2,131	100.8		105.5
Communications		2,752		2,757		121		(8)		2,870	100.2		104.3
Technology		1,751		1,769		67		(6)		1,830	101.0		104.5
Energy		3,047		3,089		163		(3)		3,249	101.4		106.6
FDIC guaranteed		157		158		2		-		160	100.6		101.9
Other		1,890		1,795		75		(6)		1,864	95.0		98.6
Total corporate fixed income portfolio		40,591		40,610		2,014		(255)		42,369	100.0		104.4
U.S. government and agencies		6,413		5,872		318		(3)		6,187	91.6		96.5
Municipal		16,746		14,557		491		(375)		14,673	86.9		87.6
Foreign government		3,079		2,720		327		(4)		3,043	88.3		98.8
RMBS		7,058		6,356		203		(569)		5,990	90.1		84.9
CMBS		2,102		2,083		57		(154)		1,986	99.1		94.5
ABS		4,521		4,281		95		(234)		4,142	94.7		91.6
Redeemable preferred stock		21		23		1		-		24	109.5		114.3
Total fixed income securities	$	80,531	$	76,502	$	3,506	$	(1,594)	$	78,414	95.0		97.4

(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 $534 million, $1.43 billion, $3.63 billion and $1.12 billion, respectively.

(2)Excluding the impact of zero-coupon securities, the percentage of amortized cost to par value would be 100.4% for corporates, 101.2% for U.S. government and agencies, 99.9% for municipals and 103.6% for foreign governments.  Similarly, excluding the impact of zero-coupon securities, the percentage of fair value to par value would be 104.7% for corporates, 104.6% for U.S. government and agencies, 101.1% for municipals and 110.1% for foreign governments.

35

THE ALLSTATE CORPORATION

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

($ in millions)

		As of June 30, 2011
		Aaa					Aa					A					Baa					Ba or lower (1)					Total
		Fair		Unrealized			Fair		Unrealized			Fair		Unrealized			Fair		Unrealized			Fair		Unrealized			Par		Fair		Unrealized
		value		gain/(loss)			value		gain/(loss)			value		gain/(loss)			value		gain/(loss)			value		gain/(loss)			value		value		gain/(loss)
U.S. government and agencies	$	6,187	$	315		$	-	$	-		$	-	$	-		$	-	$	-		$	-	$	-		$	6,413	$	6,187	$	315
Municipal
Tax exempt		1,367		82			4,063		126			2,383		40			1,202		(37	)		501		(54	)		9,885		9,516		157
Taxable		198		5			2,477		83			1,047		(5	)		424		(37	)		116		(22	)		5,900		4,262		24
Auction rate securities		683		(40	)		59		(6	)		83		(11	)		70		(8	)		-		-			961		895		(65	)
Sub-total		2,248		47			6,599		203			3,513		24			1,696		(82	)		617		(76	)		16,746		14,673		116
Corporate
Public		1,188		32			2,853		117			10,119		463			10,110		518			2,716		36			25,548		26,986		1,166
Privately placed		1,115		37			1,853		58			4,184		206			6,705		263			1,526		29			15,043		15,383		593
Sub-total		2,303		69			4,706		175			14,303		669			16,815		781			4,242		65			40,591		42,369		1,759
Foreign government		1,602		227			567		26			524		41			350		29			-		-			3,079		3,043		323
RMBS
U.S. government sponsored entities		3,374		158			-		-			-		-			-		-			-		-			3,165		3,374		158
Prime residential mortgage-backed securities		271		5			40		(1	)		197		2			39		1			541		(12	)		1,175		1,088		(5	)
Alt-A residential mortgage-backed securities		3		-			43		(1	)		72		(1	)		47		1			398		(77	)		904		563		(78	)
Subprime residential mortgage-backed securities		-		-			66		(19	)		43		(6	)		86		(27	)		770		(389	)		1,814		965		(441	)
Sub-total		3,648		163			149		(21	)		312		(5	)		172		(25	)		1,709		(478	)		7,058		5,990		(366	)
CMBS		1,053		42			278		(6	)		153		(14	)		331		(58	)		171		(61	)		2,102		1,986		(97	)
ABS
Collateralized debt obligations		12		-			705		(4	)		377		(31	)		285		(60	)		411		(84	)		2,211		1,790		(179	)
Consumer and other asset-backed securities		1,371		37			387		4			328		3			219		(1	)		47		(3	)		2,310		2,352		40
Sub-total		1,383		37			1,092		-			705		(28	)		504		(61	)		458		(87	)		4,521		4,142		(139	)
Redeemable preferred stock		-		-			1		-			-		-			23		1			-		-			21		24		1
Total fixed income securities	$	18,424	$	900		$	13,392	$	377		$	19,510	$	687		$	19,891	$	585		$	7,197	$	(637	)	$	80,531	$	78,414	$	1,912

(1)Securities rated below investment grade comprise securities with a rating of Ba or lower. As of June 30, 2011, 58% of our below investment grade gross unrealized losses were concentrated in RMBS, specifically Alt-A and Subprime.  The fair value of these securities totaled $1.02 billion, a decrease of 5.7%, compared to $1.08 billion as of December 31, 2010.  Gross unrealized losses on these securities totaled $478 million as of June 30, 2011, an improvement of 13.7%, compared to $554 million as of December 31, 2010, due to impairment write-downs, principal collections, sales and improved valuations, partially offset by the downgrade of certain securities to below investment grade.

36

THE ALLSTATE CORPORATION

REALIZED CAPITAL GAINS AND LOSSES BY TRANSACTION TYPE

($ in millions)

	Three months ended																			Six months ended
		June 30,			March 31,			Dec. 31,			Sept. 30,			June 30,			March 31,			June 30,			June 30,
		2011			2011			2010			2010			2010			2010			2011			2010
Impairment write-downs	$	(70	)	$	(114	)	$	(198	)	$	(137	)	$	(239	)	$	(223	)	$	(184	)	$	(462	)
Change in intent write-downs		(16	)		(69	)		(75	)		(30	)		(67	)		(32	)		(85	)		(99	)
Net other-than-temporary impairment losses recognized in earnings		(86	)		(183	)		(273	)		(167	)		(306	)		(255	)		(269	)		(561	)
Sales		141			283			134			319			145			88			424			233
Valuation of derivative instruments		(50	)		22			144			(133	)		(283	)		(155	)		(28	)		(438	)
Settlements of derivative instruments		(3	)		(89	)		35			(152	)		(27	)		(30	)		(92	)		(57	)
EMA limited partnership income		55			63			76			(11	)		20			4			118			24
Total	$	57		$	96		$	116		$	(144	)	$	(451	)	$	(348	)	$	153		$	(799	)

37

THE ALLSTATE CORPORATION

PROPERTY-LIABILITY

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

($ in millions)

	Three months ended																				Six months ended
			June 30,			March 31,			Dec. 31,			Sept. 30,			June 30,			March 31,			June 30,			June 30,
			2011			2011			2010			2010			2010			2010			2011			2010
NET INVESTMENT INCOME
Fixed income securities:
Tax-exempt		$	108		$	111		$	118		$	132		$	153		$	165		$	219		$	318
Taxable			180			169			154			152			143			130			349			273
Equity securities			32			18			25			16			23			20			50			43
Mortgage loans			1			-			1			-			-			1			1			1
Cost limited partnership interests (1)			7			5			10			3			3			3			12			6
Short-term			-			1			-			1			1			1			1			2
Other			1			1			1			1			5			1			2			6
Sub-total			329			305			309			305			328			321			634			649
Less: Investment expense			(19	)		(21	)		(18	)		(21	)		(18	)		(17	)		(40	)		(35	)
Net investment income		$	310		$	284		$	291		$	284		$	310		$	304		$	594		$	614
Net investment income, after-tax		$	236		$	219		$	225		$	225		$	249		$	247		$	455		$	496
PRE-TAX YIELDS (2)
Fixed income securities:
Tax-exempt			4.9			4.8			4.9			4.9			4.9			4.9			4.9			4.9
Equivalent yield for tax-exempt			7.1			7.0			7.1			7.1			7.1			7.1			7.1			7.1
Taxable			3.8			3.6			3.4			3.4			3.5			3.5			3.8			3.5
Equity securities			3.3			1.9			2.7			2.0			2.9			2.0			2.6			2.3
Mortgage loans			3.2			6.7			7.1			4.2			5.4			6.0			3.2			5.8
Cost limited partnership interests			4.2			2.9			5.8			2.0			1.8			2.4			3.6			2.1
Total portfolio (3)			4.0			3.7			3.8			3.7			3.9			3.8			3.9			3.9
REALIZED CAPITAL GAINS AND LOSSES  (PRE-TAX) BY ASSET TYPE
Fixed income securities:
Tax-exempt		$	(16	)	$	(13	)	$	(29	)	$	76		$	(23	)	$	(4	)	$	(29	)	$	(27	)
Taxable			9			(29	)		(11	)		25			6			(43	)		(20	)		(37	)
Equity securities			(2	)		124			10			68			25			14			122			39
Limited partnership interests			20			46			44			(13	)		15			(7	)		66			8
Derivatives and other			(19	)		(71	)		68			(263	)		(129	)		(150	)		(90	)		(279	)
Total		$	(8	)	$	57		$	82		$	(107	)	$	(106	)	$	(190	)	$	49		$	(296	)
REALIZED CAPITAL GAINS AND LOSSES  (PRE-TAX) BY TRANSACTION TYPE
Impairment write-downs		$	(27	)	$	(64	)	$	(63	)	$	(57	)	$	(96	)	$	(79	)	$	(91	)	$	(175	)
Change in intent write-downs (4)			(11	)		(27	)		(33	)		(10	)		(10	)		(9	)		(38	)		(19	)
Net other-than-temporary impairment losses recognized in earnings			(38	)		(91	)		(96	)		(67	)		(106	)		(88	)		(129	)		(194	)
Sales (4)			29			172			65			228			121			41			201			162
Valuation of derivative instruments			(12	)		26			47			(143	)		(134	)		(101	)		14			(235	)
Settlements of derivative instruments			(7	)		(95	)		21			(118	)		3			(49	)		(102	)		(46	)
EMA limited partnership income			20			45			45			(7	)		10			7			65			17
Total		$	(8	)	$	57		$	82		$	(107	)	$	(106	)	$	(190	)	$	49		$	(296	)
AVERAGE INVESTED ASSETS (in billions) (5)		$	35.0		$	34.7		$	34.7		$	34.9		$	34.8		$	34.6		$	34.8		$	34.7

(1)As of June 30, 2011, Property-Liability has commitments to invest in additional limited partnership interests totaling $1.01 billion.

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

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

(4)Includes $6 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 ended June 30, 2011 and six months ended June 30, 2011, respectively.

(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.

38

THE ALLSTATE CORPORATION

ALLSTATE FINANCIAL

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

($ in millions)

	Three months ended																				Six months ended
			June 30,			March 31,			Dec. 31,			Sept. 30,			June 30,			March 31,			June 30,			June 30,
			2011			2011			2010			2010			2010			2010			2011			2010
NET INVESTMENT INCOME
Fixed income securities		$	596		$	607		$	614		$	631		$	646		$	652		$	1,203		$	1,298
Equity securities			2			1			2			1			2			1			3			3
Mortgage loans			86			89			89			92			99			103			175			202
Cost limited partnership interests (1)			11			5			11			3			4			3			16			7
Short-term			-			1			-			1			-			1			1			1
Other			24			9			5			3			-			(2	)		33			(2	)
Sub-total			719			712			721			731			751			758			1,431			1,509
Less: Investment expense			(25	)		(28	)		(29	)		(24	)		(28	)		(27	)		(53	)		(55	)
Net investment income		$	694		$	684		$	692		$	707		$	723		$	731		$	1,378		$	1,454
Net investment income, after-tax		$	455		$	449		$	453		$	463		$	473		$	478		$	904		$	951
PRE-TAX YIELDS (2)
Fixed income securities			5.0			5.0			5.0			5.0			5.1			5.1			5.0			5.1
Equity securities			2.9			3.3			3.6			2.8			3.5			2.3			3.1			2.9
Mortgage loans			5.2			5.4			5.3			5.2			5.4			5.3			5.3			5.4
Cost limited partnership interests			6.3			2.7			7.0			1.8			3.3			1.9			4.5			2.6
Total portfolio (3)			4.9			4.8			4.8			4.8			4.8			4.8			4.9			4.8
REALIZED CAPITAL GAINS AND LOSSES (PRE-TAX) BY ASSET TYPE
Fixed income securities		$	46		$	15		$	(85	)	$	(19	)	$	(177	)	$	(92	)	$	61		$	(269	)
Equity securities			17			(2	)		1			15			20			-			15			20
Mortgage loans			(3	)		(4	)		(17	)		(1	)		(28	)		(25	)		(7	)		(53	)
Limited partnership interests			30			22			28			(6	)		9			(15	)		52			(6	)
Derivatives and other			(28	)		8			109			(27	)		(177	)		(30	)		(20	)		(207	)
Total		$	62		$	39		$	36		$	(38	)	$	(353	)	$	(162	)	$	101		$	(515	)
REALIZED CAPITAL GAINS AND LOSSES (PRE-TAX) BY TRANSACTION TYPE
Impairment write-downs		$	(43	)	$	(50	)	$	(134	)	$	(80	)	$	(143	)	$	(144	)	$	(93	)	$	(287	)
Change in intent write-downs			(5	)		(42	)		(42	)		(20	)		(57	)		(23	)		(47	)		(80	)
Net other-than-temporary impairment losses recognized in earnings			(48	)		(92	)		(176	)		(100	)		(200	)		(167	)		(140	)		(367	)
Sales			112			111			68			89			18			44			223			62
Valuation of derivative instruments			(38	)		(4	)		99			10			(149	)		(54	)		(42	)		(203	)
Settlements of derivative instruments			4			6			14			(34	)		(30	)		19			10			(11	)
EMA limited partnership income			32			18			31			(3	)		8			(4	)		50			4
Total		$	62		$	39		$	36		$	(38	)	$	(353	)	$	(162	)	$	101		$	(515	)
AVERAGE INVESTED ASSETS (in billions) (4)		$	58.8		$	60.2		$	61.0		$	61.4		$	62.5		$	63.9		$	59.5		$	63.1

(1)As of June 30, 2011, Allstate Financial has commitments to invest in additional limited partnership interests totaling $705 million.

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

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

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

39

Definitions of Non-GAAP and Operating Measures

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

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

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

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

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

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

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

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

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

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

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

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

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

Operating Measure

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

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

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

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

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

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

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

Effect of Discontinued Lines and Coverages on combined ratio is the ratio of claims and claims expense and 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.

40