Allstate Reports Strong 2012 Earnings and Increases Cash Returns to Shareholders

     Allstate Reports Strong 2012 Earnings and Increases Cash Returns to
                                 Shareholders

PR Newswire

NORTHBROOK, Ill., Feb. 6, 2013

NORTHBROOK, Ill., Feb. 6, 2013 /PRNewswire/ --The Allstate Corporation (NYSE:
ALL) today reported financial results for the fourth quarter and full year
2012:

The Allstate Corporation Consolidated Highlights
                             Three months ended     Twelve months ended

                             December 31,           December 31,
($ in millions, except per               %                        %
share                        2012  2011             2012   2011
                                         Change                   Change
 amounts and ratios)
Consolidated revenues        $     $     3.8        $      $      2.0
                             8,547 8,236            33,315 32,654
Net income                   394   712   (44.7)     2,306  787    193.0
Net income per diluted share 0.81  1.40  (42.1)     4.68   1.50   212.0
Operating income*            289   735   (60.7)     2,148  662    224.5
Operating income per diluted 0.59  1.45  (59.3)     4.36   1.27   243.3
share*
Book value per share                                42.39  36.18  17.2
Book value per share,
excluding the

 impact ofunrealized net
capital gains                                       37.14  33.58  10.6

 and losses onfixed
income

 securities*
Catastrophe losses           1,061 66    NM         2,345  3,815  (38.5)
Property-Liability combined  101.7 90.9  10.8 pts  95.5   103.4  (7.9)pts
ratio
Property-Liability combined

 ratio excludingthe
effect of

 catastrophes,prior
yearreserve

 reestimates,              86.7  90.7  (4.0)pts  87.2   89.3   (2.1)pts
businesscombination

 expensesand
theamortizationof

 purchased tangibleassets

 ("underlyingcombined
ratio")*
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 in the "Definitions of Non-GAAP Measures" section of this
      document.

"Allstate had a good finish to a strong year despite the costs incurred in the
fourth quarter related to Superstorm Sandy," said Thomas J. Wilson, chairman,
president and chief executive officer of The Allstate Corporation. "Our
strategy of providing differentiated products to four consumer segments while
improving returns is working. The Allstate branded business maintained strong
auto profitability, dramatically improved returns in homeowners and began to
reduce the negative impact on policies in force related to profit improvement
actions. Esurance, Encompass and Allstate Financial maintained their growth
trajectories by staying focused on targeted customer value propositions.
Proactive investment actions resulted in total returns of over 7 percent for
the year. Overall premiums increased and net and operating income more than
doubled in 2012 versus 2011. As a result, book value per share increased to
$42.39, a 17.2 percent increase for the year," continued Wilson.

"The board's confidence in the execution of this strategy enabled us to raise
the cash returned to shareholders. The quarterly dividend was increased by
13.6 percent from the prior quarter's dividend to $0.25 per share. An
additional $1 billion share repurchase program was also approved, which will
be implemented in conjunction with a repurchase program funded with hybrid
debt announced in December," concluded Wilson.

Consolidated Financial Results

Net income for 2012 was $2.31 billion, or $4.68 per diluted share, compared to
$787 million, or $1.50 per diluted share in 2011. The increase was primarily
due to higher property-liability and Allstate Financial operating income,
partially offset by lower net realized capital gains. Total 2012 operating
income was $2.15 billion, or $4.36 per diluted share, an increase from 2011 of
$1.49 billion, or $3.09 per diluted share. The increase in operating income
was driven primarily by a substantial reduction in catastrophe losses and an
improvement in the underlying property-liability combined ratio.

For the fourth quarter of 2012, net income was $394 million, or $0.81 per
diluted share, compared to $712 million, or $1.40 per diluted share in 2011.
Operating income was $289 million, or $0.59 per diluted share, compared to
$735 million, or $1.45 per diluted share in the fourth quarter of 2011.
Catastrophe losses primarily attributable to Sandy drove the decline in net
and operating income for the quarter, partially offset by a 4.0 point
improvement in the underlying combined ratio.

Property-Liability Underlying Combined Ratio Finished Better Than the
Full-Year Outlook; Progress on Customer-Focused Strategy

In 2012, Allstate continued to execute on its strategy to offer unique
products to different customer segments while achieving its priorities of
maintaining auto margins, improving homeowners returns and growing insurance
premiums. For the year, total property-liability net written premium was
$27.03 billion, an increase of 4.0% over 2011. The increase was primarily the
result of our acquisition of Esurance to serve the self-directed customer
segment. In the customer segments that prefer local advice and assistance,
the Allstate brand increased less than a percent in 2012, while Encompass grew
premiums by 5% for the year. Overall unit growth was negative for 2012,
reflecting declines in Allstate brand auto and homeowners due to pricing and
underwriting actions to improve auto returns in New York and Florida, as well
as actions to improve returns in homeowners. The unit decline was partially
offset by growth in Esurance, up 30.9%, and Encompass, up 5.6% from year-end
2011. Esurance surpassed $1 billion in net written premium for 2012.

In 2012, property-liability recorded a combined ratio of 95.5, a 7.9 point
improvement from the 2011 combined ratio of 103.4. Results benefited from
reduced catastrophe losses and an improved underlying combined ratio compared
to 2011. The 2012 underlying combined ratio was 87.2, better than the 88-91
outlook range established at the beginning of the year. The positive effects
of rate and underwriting actions exceeding the loss trends in auto and
property as well as the favorable effects of milder weather were the primary
drivers of this result. Allstate brand standard auto produced an underlying
combined ratio of 94.0 compared to 95.3 in 2011. On a recorded basis, the
combined ratio for Allstate brand standard auto was 96.1, a 0.4 point increase
from 2011, primarily due to losses from Sandy. Allstate brand homeowners had
a recorded combined ratio of 88.0 and an underlying combined ratio of 65.1,
both significantly improved from 2011 levels. This improvement is the result
of profit improvement actions and favorable weather, which reduced claim
frequencies below expected levels. Other personal lines, which include
Emerging Businesses and Encompass, also achieved margin improvements.
Esurance recorded a combined ratio of 119.9 with an underlying combined ratio
of 108.2 as we continue to invest in growth while monitoring the profitability
of acquired business. Maintaining auto profitability and improving homeowners
returns remain priorities in 2013.

In the fourth quarter, total net written premium of $6.64 billion grew 3.3%
compared to prior year. In the consumer segment served by the Allstate brand,
total net premium written grew 1.9% over the fourth quarter of 2011, with
standard auto and homeowners increasing 1.6% and 3.4% compared to prior year,
respectively, on the strength of higher average premiums and a 4.6% increase
in Emerging Businesses. Net written premium for Encompass, which serves
consumers who desire advice but are less brand-focused, increased 8.2% in the
quarter on stronger sales of package policies. In the self-directed consumer
segment, Esurance posted an approximate 30% increase over Q4 2011 on an
acquisition date-adjusted basis for net written premium.

The fourth quarter 2012 property-liability underlying combined ratio was 86.7,
versus 90.7 in the fourth quarter of 2011, driven by improvements in auto and
homeowners. The fourth quarter 2012 recorded combined ratio was 101.7 and
included 10 catastrophe events estimated to cost $1.16 billion, offset by
favorable reserve reestimates of prior catastrophe losses worth $103 million,
$80 million of which were for pre-2012 catastrophe events. The loss estimate
for Sandy was updated from an initial estimate of $1.075 billion to $1.117
billion. Of the increase, approximately $22 million was due to higher losses
not covered by our reinsurance programs, with the balance resulting from claim
expenses not recoverable under the National Flood Insurance Program,
additional reinsurance premiums and Fair Plan assessments.

The underlying property-liability combined ratio is expected to be between 88
and 90 for 2013. This reflects the goal of maintaining auto margins and the
improvements in homeowners profitability, while reflecting the adverse impact
on claim frequencies from more severe weather.

Allstate Financial Posted Strong Sales of Underwritten Products; Operating
Income Increased

Allstate Financial continued with its strategy to grow underwritten products
sold through Allstate agencies and Allstate Benefits, further reduce its
concentration in spread-based products and improve returns. In 2012, issued
life insurance policies written through Allstate agencies increased 9.3% for
the year. Allstate Benefits, the worksite voluntary employee benefits
business, had a successful annual enrollment season, with new business written
premiums increasing 6.5% for the year. Total premiums and contract charges on
underwritten products of $2.18 billion increased 3.8% compared to 2011. The
actions to reduce the spread-based business resulted in a $3.01 billion
decline in contractholder funds to $39.32 billion at year-end 2012.

Net income for 2012 decreased to $541 million from $590 million in 2011 due to
after-tax realized capital losses of $8 million in 2012 compared to gains of
$250 million in 2011, partially offset by a reserve release in 2012 associated
with a non-routine valuation adjustment for derivatives embedded in
equity-indexed annuities and an increase in operating income to $529 million.
Despite the increase in operating income, higher capital levels resulted in an
operating income return on attributed equity of 8.0%, down slightly from 2011
level of 8.3%. Allstate Financial paid $357 million of dividends and
repayments ofsurplus notes during 2012 to the parent and its affiliates.
Further reducing the size and improving returns ofthe spread-based businesses
through operational and financial actions are priorities in 2013. 

In the fourth quarter of 2012, premiums and contract charges of $566 million
were slightly less than in the fourth quarter of 2011 as a 4.9% increase in
underwritten products was more than offset by a decline in annuities.
Operating income in the quarter was $144 million, a $14 million increase from
the 2011 quarter, due to higher investment spread and lower expenses,
partially offset by a decrease in benefit spread. The increase in investment
spread was primarily driven by higher income on limited partnership
investments, including the 2012 reclassification of equity method limited
partnership income from realized capital gains to net investment income, as
well as lower crediting rates, partially offset by the impact of the continued
reduction in spread-based business in force. The decline in the benefit
spread was primarily due to the fourth quarter 2011 impact of a $38 million
pre-tax reserve release associated with a contract modification at Allstate
Benefits.

Proactive Investment Decisions Delivered Strong Investment Results

Allstate delivered solid total returns of 7.3% in 2012, driven by increases in
fixed income and equity appreciation, and higher limited partnership income.
The impact of lower interest income caused by low interest rates and risk
mitigation programs partially offset these increases. We maintained our
credit exposure but began reducing interest rate risk and shifted a greater
mix of our holdings to direct ownership of assets. The interest-rate risk
reduction is focused on the property-liability portfolio and entails the sale
of long-duration municipal and corporate bonds with reinvestment primarily in
shorter duration fixed income securities. This move better positions the
portfolio to withstand a rise in interest rates but will negatively impact
investment income in 2013.

Allstate's consolidated investment portfolio increased to $97.28 billion at
December 31, 2012 compared to $95.62 billion at December 31, 2011, as
investment returns and operating cash flow more than offset the impact of the
managed reduction in Allstate Financial's liabilities. Pre-tax net unrealized
capital gains were $5.55 billion at December 31, 2012 compared to $2.88
billion at December 31, 2011, resulting from tighter credit spreads, lower
interest rates, and higher equity values.

For the fourth quarter of 2012, net investment income totaled $1.03 billion
and the total portfolio yield was 4.7%, higher than both the prior quarter and
the fourth quarter of 2011. Excluding limited partnership results, fourth
quarter 2012 net investment income increased compared to the prior quarter but
was lower than in the fourth quarter of 2011, consistent with the reduction in
Allstate Financial's liabilities and lower market yields. Net investment
income was $4.01 billion for 2012, consistent with 2011. Investment income
and fixed income portfolio yields will be pressured by reinvestment in the
current low interest rate environment, actions to reduce interest rate risk
and the reduction in Allstate Financial's liabilities.

Realized capital gains were $327 million in 2012 compared to $503 million in
2011 as lower trading gains were only partially offset by a reduction in
impairment losses from the prior year. Pre-tax net realized capital gains for
the fourth quarter of 2012 were $204 million compared to pre-tax net realized
capital gains of $86 million for the prior year quarter. Realized capital
gains in the fourth quarter 2012 comprise sales related to the interest-rate
risk reduction in our property-liability portfolio.

Focus on Capital Management Continues

"Continuing our record of proactive capital management, in 2012 we completed a
$1 billion share repurchase and initiated a $1 billion share repurchase to be
funded with hybrid debt to further optimize our capital structure. In January
2013, we issued $500 million of 5.10% fixed-to-floating rate subordinated
debentures," said Steve Shebik, chief financial officer. "Today, the Board
took additional actions to improve shareholder value by increasing the
quarterly dividend to $0.25 and authorizing an additional $1 billion
repurchase program expected to be completed by March 2014, bringing the total
buyback authorization to $2.0 billion. We repurchased 4.6 million shares at a
cost of $182 million in the fourth quarter, bringing the total for 2012 to
26.7 million shares repurchased for $910 million. Allstate's earnings,
portfolio valuation growth and these repurchases increased book value per
diluted share by 17.2% to $42.39 at year-end 2012."

Allstate will pay a quarterly dividend of $0.25 on each outstanding share of
the Corporation's common stock, payable in cash on April 1, 2013 to
shareholders of record at the close of business on February 28, 2013.

Statutory surplus at December 31, 2012 was an estimated $17.2 billion for the
combined insurance operating companies. Property-liability surplus was an
estimated $13.7 billion, with Allstate Financial companies accounting for the
remainder. This compared to combined insurance companies' surplus at
September 30, 2012 of $17.0 billion and December 31, 2011 of $15.6 billion.
Deployable assets at the holding company level totaled $2.06 billion at
year-end 2012.

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 Thursday, February 7.

The Allstate Corporation (NYSE: ALL) is the nation's largest publicly held
personal lines insurer, serving approximately 16 million households through
its Allstate, Encompass, Esurance and Answer Financial brand names and
Allstate Financial business segment. Allstate branded insurance products
(auto, home, life and retirement) and services are offered through Allstate
agencies, independent agencies, and Allstate exclusive financial
representatives, as well as via www.allstate.com, www.allstate.com/financial
and 1-800 Allstate^®, and are widely known through the slogan "You're In Good
Hands With Allstate^®."

THE ALLSTATE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
($ in millions, except per share    Three months ended    Twelve months ended
data)
                                    December 31,          December 31,
                                    2012          2011    2012          2011
                                    (unaudited)           (unaudited)
Revenues
 Property-liability insurance   $ 6,744       $ 6,605 $ 26,737      $ 25,942
premiums
 Life and annuity premiums and    566           570     2,241         2,238
contract charges
 Net investment income            1,033         975     4,010         3,971
 Realized capital gains and
losses:
Total other-than-temporary          (44)          (128)   (239)         (563)
impairment losses
Portion of loss recognized in
other                               (10)          4       6             (33)

 comprehensive income
Net other-than-temporary
impairment                        (54)          (124)   (233)         (596)

 losses recognized in earnings
Sales and other realized capital
gains                               258           210     560           1,099

 and losses
Total realized capital gains
                                    204           86      327           503
 and losses
                                    8,547         8,236   33,315        32,654
Costs and expenses
 Property-liability insurance
claims and                          5,042         4,198   18,484        20,161

 claims expense
 Life and annuity contract        464           430     1,818         1,761
benefits
 Interest credited to             357           405     1,316         1,645
contractholder funds
 Amortization of deferred         947           981     3,884         3,971
policy acquisition costs
 Operating costs and expenses     1,095         1,083   4,118         3,739
 Restructuring and related        9             16      34            44
charges
 Interest expense                 92            92      373           367
                                    8,006         7,205   30,027        31,688
Gain (loss) on disposition of       3             3       18            (7)
operations
Income from operations before
income                              544           1,034   3,306         959

 tax expense
Income tax expense                  150           322     1,000         172
Net income                        $ 394         $ 712   $ 2,306       $ 787
Earnings per share:
Net income per share - Basic      $ 0.82          1.41  $ 4.71        $ 1.51
Weighted average shares - Basic     482.2         504.5   489.4         520.7
Net income per share - Diluted    $ 0.81        $ 1.40  $ 4.68        $ 1.50
Weighted average shares - Diluted   487.0         506.8   493.0         523.1
Cash dividends declared per share $ 0.22        $ 0.21  $ 0.88        $ 0.84

THE ALLSTATE CORPORATION
SEGMENT RESULTS
($ in millions, except ratios)        Three months ended   Twelve months ended
                                      December 31,         December 31,
                                      2012       2011      2012       2011
Property-Liability
 Premiums written                  $ 6,637    $ 6,426   $ 27,027   $ 25,980
 Premiums earned                   $ 6,744    $ 6,605   $ 26,737   $ 25,942
 Claims and claims expense           (5,042)    (4,198)   (18,484)   (20,161)
 Amortization of deferred policy     (870)      (880)     (3,483)    (3,477)
acquisition costs
 Operating costs and expenses        (939)      (913)     (3,536)    (3,143)
 Restructuring and related charges   (9)        (13)      (34)       (43)
^
 Underwriting (loss) income*      (116)      601       1,200      (882)
 Net investment income               362        309       1,326      1,201
 Periodic settlements and accruals
on non-hedge                          (2)        (3)       (6)        (15)

 derivative instruments
Business combination expenses and
the amortization                      25         49        124        49

 of purchasedintangible assets
 Income tax (expense) benefit on     (69)       (302)     (819)      18
operations
 Operating income                 200        654       1,825      371
 Realized capital gains and          96         7         221        54
losses, after-tax
Reclassification of periodic
settlements and accruals
                                      --         2         3          10
 on non-hedge derivative
instruments, after-tax
Business combination expenses and
the amortization
                                      (16)       (32)      (81)       (32)
of purchased intangible assets,
after-tax
 Net income                     $ 280      $ 631     $ 1,968    $ 403
 Catastrophe losses                $ 1,061    $ 66      $ 2,345    $ 3,815
 Operating ratios:
 Claims and claims expense        74.8       63.5      69.1       77.7
ratio
 Expense ratio                    26.9       27.4      26.4       25.7
 Combined ratio ^                 101.7      90.9      95.5       103.4
 Effect of catastrophe losses     15.7       1.0       8.8        14.7
on combined ratio
 Effect of prior year reserve
reestimates on                        (2.3)      (2.0)     (2.5)      (1.3)

 combined ratio
 Effect of catastrophe losses
included in prior year
                                      (1.2)      (0.5)     (1.5)      (0.5)
 reservereestimateson
combined ratio
 Effect of business combination
expenses and the

  amortization ofpurchased      0.4        0.7       0.5        0.2
intangible assets on

 combined ratio
 Effect of Discontinued Lines
and Coverages on                      --         --        0.2        0.1

 combined ratio
Allstate Financial
 Investments                       $ 56,999   $ 57,373  $ 56,999   $ 57,373
 Premiums and contract charges     $ 566      $ 570     $ 2,241    $ 2,238
 Net investment income               665        656       2,647      2,716
 Periodic settlements and accruals
on non-hedge                          10         16        55         70

 derivativeinstruments
 Contract benefits                   (464)      (430)     (1,818)    (1,761)
 Interest credited to                (347)      (385)     (1,434)    (1,617)
contractholder funds
 Amortization of deferred policy     (71)       (78)      (350)      (343)
acquisition costs
 Operating costs and expenses        (152)      (159)     (576)      (555)
 Restructuring and related charges   --         (3)       --         (1)
 Income tax expense on operations    (63)       (57)      (236)      (240)
 Operating income                 144        130       529        507
 Realized capital gains and          37         43        (8)        250
losses, after-tax
 Valuation changes on embedded
derivatives that                      (6)        (13)      82         (12)

 are nothedged, after-tax
 DAC and DSI amortization relating
to realized

 capital gains and lossesand     (4)        (16)      (42)       (108)
valuation changes on

 embedded derivativesthat are
nothedged, after-tax
 DAC and DSI unlocking relating to
realized capital gains                --         --        4          3

 andlosses, after-tax
Reclassification of periodic
settlements and accruals on
                                      (7)        (10)      (36)       (45)
 non-hedgederivative
instruments, after-tax
 Gain (loss) on disposition of       2          1         12         (5)
operations, after-tax
 Net income                     $ 166      $ 135     $ 541      $ 590
Corporate and Other
 Net investment income             $ 6        $ 10      $ 37       $ 54
 Operating costs and expenses        (96)       (88)      (379)      (393)
 Income tax benefit on operations    35         29        136        123
 Operating loss                   (55)       (49)      (206)      (216)
 Realized capital gains and          3          5         3          20
losses, after-tax
Business combination expenses,      --         (10)      --         (10)
after-tax
 Net loss                       $ (52)     $ (54)    $ (203)    $ (206)
Consolidated net income             $ 394      $ 712     $ 2,306    $ 787

THE ALLSTATE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
($ in millions, except par value data)            December 31,   December 31,
                                                   2012           2011
Assets                                             (unaudited)
Investments:
 Fixed income securities, at fair value
(amortized cost $71,915                          $ 77,017       $ 76,113

  and $73,379)
 Equity securities, at fair value (cost        4,037          4,363
$3,577 and $4,203)
 Mortgage loans                                6,570          7,139
 Limited partnership interests                 4,922          4,697
Short‑term, at fair value (amortized cost $2,336   2,336          1,291
and $1,291)
 Other                                         2,396          2,015
 Total investments                        97,278         95,618
Cash                                               806            776
Premium installment receivables, net               5,051          4,920
Deferred policy acquisition costs                  3,621          3,871
Reinsurance recoverables, net                      8,767          7,251
Accrued investment income                          781            826
Deferred income taxes                              --             722
Property and equipment, net                        989            914
Goodwill                                           1,240          1,242
Other assets                                       1,804          2,069
Separate Accounts                                  6,610          6,984
 Total assets                       $ 126,947      $ 125,193
Liabilities
Reserve for property-liability insurance claims  $ 21,288       $ 20,375
and claims expense
Reserve for life‑contingent contract benefits      14,895         14,406
Contractholder funds                               39,319         42,332
Unearned premiums                                  10,375         10,057
Claim payments outstanding                         797            827
Deferred income taxes                              597            --
Other liabilities and accrued expenses             6,429          5,978
Long-term debt                                     6,057          5,908
Separate Accounts                                  6,610          6,984
 Total liabilities                    106,367        106,867
Equity
Preferred stock, $1 par value, 25 million shares
authorized,                                        --             --

 none issued
Common stock, $.01 par value, 2.0 billion shares
authorized and
                                                   9              9
 900 millionissued, 479 million and 501
million shares outstanding
Additional capital paid‑in                         3,162          3,189
Retained income                                    33,783         31,909
Deferred ESOP expense                              (41)           (43)
Treasury stock, at cost (421 million and 399       (17,508)       (16,795)
million shares)
Accumulated other comprehensive income:
Unrealized net capital gains and losses:
Unrealized net capital losses on fixed income      (11)           (174)
securitieswith OTTI
Other unrealized net capital gains and losses      3,614          2,041
Unrealized adjustment to DAC, DSI and insurance    (769)          (467)
reserves
 Total unrealized net capital gains and       2,834          1,400
losses
 Unrealized foreign currency translation       70             56
adjustments
 Unrecognized pension and other                (1,729)        (1,427)
postretirement benefit cost
 Total accumulated other              1,175          29
comprehensive income
 Total shareholders' equity           20,580         18,298
Noncontrolling interest                            --             28
 Total equity                         20,580         18,326
 Total liabilities and equity       $ 126,947      $ 125,193

THE ALLSTATE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                        Twelve months ended
($ in millions)
                                                        December 31,
                                                        2012          2011
Cash flows from operating activities                    (unaudited)
Net income                                            $ 2,306       $ 787
Adjustments to reconcile net income to net cash
provided by operating

 activities:
Depreciation, amortization and other non-cash items     388           252
Realized capital gains and losses                       (327)         (503)
(Gain) loss on disposition of operations                (18)          7
Interest credited to contractholder funds               1,316         1,645
Changes in:
Policy benefits and other insurance reserves            214           (77)
Unearned premiums                                       306           37
Deferred policy acquisition costs                       (18)          177
Premium installment receivables, net                    (125)         33
Reinsurance recoverables, net                           (1,560)       (716)
Income taxes                                           698           133
Other operating assets and liabilities                  (126)         154
Net cash provided by operating activities               3,054         1,929
Cash flows from investing activities
Proceeds from sales
 Fixed income securities                            18,872        29,436
 Equity securities                                  1,495         2,012
 Limited partnership interests                      1,398         1,000
 Mortgage loans                                     14            97
 Other investments                                  148           164
Investment collections
Fixed income securities                                 5,417         4,951
Mortgage loans                                          1,064         634
Other investments                                       128           123
Investment purchases
Fixed income securities                                 (22,658)      (27,896)
Equity securities                                       (671)         (1,824)
Limited partnership interests                           (1,524)       (1,696)
Mortgage loans                                          (525)         (1,241)
Other investments                                       (665)         (204)
Change in short-term investments, net                   (698)         2,182
Change in other investments, net                        58            (415)
Purchases of property and equipment, net                (285)         (246)
Disposition (acquisition) of operations, net of cash    13            (916)
acquired
Net cash provided by investing activities               1,581         6,161
Cash flows from financing activities
Proceeds from issuance of long-term debt                493           7
Repayment of long-term debt                             (352)         (7)
Contractholder fund deposits                            2,158         2,176
Contractholder fund withdrawals                         (5,519)       (8,680)
Dividends paid                                          (534)         (435)
Treasury stock purchases                                (913)         (953)
Shares reissued under equity incentive plans, net       85            19
Excess tax benefits on share-based payment              10            (5)
arrangements
Other                                                   (33)          2
Net cash used in financing activities                   (4,605)       (7,876)
Net increase in cash                                    30            214
Cash at beginning of period                             776           562
Cash at end of period                                 $ 806         $ 776

Definitions of Non-GAAP Measures

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

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

  orealized 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),
  ovaluation changes on embedded derivatives that are not hedged, after-tax,
  oamortization of 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,
  obusiness combination expenses and the amortization of purchased intangible
    assets, after-tax,
  ogain (loss) on disposition of operations, after-tax, and
  oadjustments for other significant non-recurring, infrequent or unusual
    items, when (a) the nature of the charge or gain is such that it is
    reasonably unlikely to recur within two years, or (b) there has been no
    similar charge or gain within the prior two years.

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

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

The following tables reconcile operating income and net income.

($ in millions,
except per share   For the three months ended December 31,
data)
                   Property-Liability   Allstate       Consolidated    Per diluted
                                        Financial                      share
                   2012        2011     2012   2011    2012    2011    2012     2011
Operating income $ 200     $   654    $ 144  $ 130   $ 289   $ 735   $ 0.59   $ 1.45
Realized capital   143         12       56     68      204     86
gains and losses
Income tax         (47)        (5)      (19)   (25)    (68)    (31)
expense
Realized capital
gains and
losses,            96          7        37     43      136     55      0.28     0.11

 after-tax
Valuation
changes on
embedded

 derivatives     --          --       (6)    (13)    (6)     (13)    (0.01)   (0.03)
that are not
hedged,

 after-tax
DAC and DSI
amortization
relating to

 realized
capital gains
and losses and

 valuation       --          --       (4)    (16)    (4)     (16)    (0.01)   (0.03)
changes on
embedded

 derivatives
that are not
hedged,

after-tax
DAC and DSI
unlocking
relating to

 realized        --          --       --     --      --      --      --       --
capital gains
and losses,

 after-tax
Reclassification
of periodic
settlements

 and accruals    --          2        (7)    (10)    (7)     (8)     (0.01)   (0.02)
on non-hedge
derivative

 instruments,
after-tax
Business
combination
expenses and the

 amortization    (16)        (32)     --     --      (16)    (42)    (0.03)   (0.08)
of purchased
intangible

 assets,
after-tax
Gain on
disposition of
operations,        --          --       2      1       2       1       --       --

 after-tax
Net income       $ 280     $   631    $ 166  $ 135   $ 394   $ 712   $ 0.81   $ 1.40
                   For the twelve months ended December 31,
                   Property-Liability   Allstate       Consolidated    Per diluted
                                        Financial                      share
                   2012        2011     2012   2011    2012    2011    2012     2011
Operating income $ 1,825   $   371    $ 529  $ 507   $ 2,148 $ 662   $ 4.36   $ 1.27
Realized capital   335         85       (13)   388     327     503
gains and losses
Income tax
(expense)          (114)       (31)     5      (138)   (111)   (179)
benefit
Realized capital
gains and
losses,            221         54       (8)    250     216     324     0.44     0.62

 after-tax
Valuation
changes on
embedded

 derivatives     --          --       82     (12)    82      (12)    0.17     (0.02)
that are not
hedged,

 after-tax
DAC and DSI
amortization
relating to

 realized
capital gains
and losses and

 valuation       --          --       (42)   (108)   (42)    (108)   (0.09)   (0.21)
changes on
embedded

 derivatives
that are not
hedged,

after-tax
DAC and DSI
unlocking
relating to

 realized        --          --       4      3       4       3       0.01     --
capital gains
and losses,

 after-tax
Reclassification
of periodic
settlements

 and accruals    3           10       (36)   (45)    (33)    (35)    (0.07)   (0.07)
on non-hedge
derivative

 instruments,
after-tax
Business
combination
expenses and the

 amortization    (81)        (32)     --     --      (81)    (42)    (0.16)   (0.08)
of purchased
intangible

 assets,
after-tax
Gain (loss) on
disposition of
operations,        --          --       12     (5)     12      (5)     0.02     (0.01)

 after-tax
Net income       $ 1,968   $   403    $ 541  $ 590   $ 2,306 $ 787   $ 4.68   $ 1.50

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.

                                                   For the twelve months ended
($ in millions)
                                                   December 31,
                                                   2012             2011
Return on shareholders' equity
Numerator:
 Net income                                    $ 2,306      $     787
Denominator:
 Beginning shareholders' equity                $ 18,298     $     18,617
 Ending shareholders' equity                     20,580           18,298
 Average shareholders' equity                   $ 19,439     $     18,458
 Return on shareholders' equity                 11.9%            4.3%
                                                   For the twelve months ended

                                                   December 31,
                                                   2012             2011
Operating income return on shareholders' equity
Numerator:
 Operating income                              $ 2,148      $     662
Denominator:
 Beginning shareholders' equity                $ 18,298     $     18,617
 Unrealized net capital gains and losses         1,400            948
 Adjusted beginning shareholders' equity         16,898           17,669
 Ending shareholders' equity                     20,580           18,298
 Unrealized net capital gains and losses         2,834            1,400
 Adjusted ending shareholders' equity            17,746           16,898
 Average adjusted shareholders' equity          $ 17,322     $     17,284
 Operating income return on shareholders'       12.4%            3.8%
equity

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.

                                                         For the twelve months
($ in millions)                                          ended

                                                         December 31,
                                                         2012         2011
Allstate Financial segment return on attributed equity
Numerator:
 Net income                                          $ 541      $   590
Denominator:
 Beginning attributed equity ^(1)                    $ 7,230    $   6,385
 Ending attributed equity                              8,446        7,230
 Average attributed equity                            $ 7,838    $   6,808
 Return on attributed equity                          6.9%         8.7%
                                                         For the twelve months
                                                         ended

                                                         December 31,
                                                         2012         2011
Allstate Financial segment operating income return on

 attributed equity
Numerator:
 Operating income                                    $ 529      $   507
Denominator:
 Beginning attributed equity                         $ 7,230    $   6,385
 Unrealized net capital gains and losses               842          548
 Adjusted beginning attributed equity                  6,388        5,837
 Ending attributed equity                              8,446        7,230
 Unrealized net capital gains and losses               1,678        842
 Adjusted ending attributed equity                     6,768        6,388
 Average adjusted attributed equity                   $ 6,578    $   6,113
 Operating income return on attributedequity         8.0%         8.3%
Reconciliation of beginning and ending Allstate
Financial                                                For the twelve months
                                                         ended
 segment attributed equity and The Allstate
                                                         December 31,
 Corporationbeginning and ending shareholders'
equity
                                                         2012         2011
Beginning Allstate Financial segment attributed equity $ 7,230    $   6,385
Beginning all other equity                               11,068       12,232
Beginning Allstate Corporation shareholders' equity    $ 18,298   $   18,617
Ending Allstate Financial segment attributed equity    $ 8,446    $   7,230
Ending all other equity                                  12,134       11,068
Ending Allstate Corporation shareholders' equity       $ 20,580   $   18,298
           Allstate Financial attributed equity is the sum of equity for
^(1)       Allstate Life Insurance Company, the applicable equity for American
           Heritage Life Investment Corporation, and the equity for Allstate
           Bank. Allstate Bank's equity is zero beginning March 31, 2012.

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

A reconciliation of the Property-Liability underlying combined ratio to the
Property-Liability combined ratio is provided in the following table.

                                       Three months ended  Twelve months ended

                                       December 31,        December 31,
                                       2012       2011     2012        2011
Combined ratio excluding the effect of
catastrophes,

 prior year reserve reestimates,
business combination
                                       86.7       90.7     87.2        89.3
 expenses and the amortization of
purchased intangible

 assets ("underlying combined
ratio")
Effect of catastrophe losses           15.7       1.0      8.8         14.7
Effect of prior year non-catastrophe   (1.1)      (1.5)    (1.0)       (0.8)
reserve reestimates
Effect of business combination
expenses and the amortization          0.4        0.7      0.5         0.2

 of purchased intangible assets
Combined ratio                         101.7      90.9     95.5        103.4
Effect of prior year catastrophe       (1.2)      (0.5)    (1.5)       (0.5)
reserve reestimates

Underwriting margin is calculated as 100% minus the combined ratio.

In this news release, we provide our outlook range on the Property-Liability
2013 underlying combined ratio. 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.

A reconciliation of the Allstate brand standard auto underlying combined ratio
to the Allstate brand standard auto combined ratio is provided in the
following table.

                                       Three months ended  Twelve months ended

                                       December 31,        December 31,
                                       2012       2011     2012        2011
Underlying combined ratio              94.0       98.4     94.0        95.3
Effect of catastrophe losses           9.3        0.2      3.9         2.6
Effect of prior year non-catastrophe   (1.6)      (3.1)    (1.8)       (2.2)
reserve reestimates
Combined ratio                         101.7      95.5     96.1        95.7
Effect of prior year catastrophe       (0.1)      (0.1)    (0.2)       (0.1)
reserve reestimates

A reconciliation of the Allstate brand homeowners underlying combined ratio to
the Allstate brand homeowners combined ratio is provided in the following
table.

                                       Three months ended  Twelve months ended

                                       December 31,        December 31,
                                       2012       2011     2012        2011
Underlying combined ratio              62.4       67.0     65.1        70.9
Effect of catastrophe losses           32.0       3.5      23.2        50.0
Effect of prior year non-catastrophe   (0.5)      (0.5)    (0.3)       0.7
reserve reestimates
Combined ratio                         93.9       70.0     88.0        121.6
Effect of prior year catastrophe       (4.5)      (1.9)    (4.9)       (1.9)
reserve reestimates

A reconciliation of the Encompass brand underlying combined ratio to the
Encompass brand combined ratio is provided in the following table.

                                       Three months ended  Twelve months ended

                                       December 31,        December 31,
                                       2012       2011     2012        2011
Underlying combined ratio              97.1       99.6     96.0        96.8
Effect of catastrophe losses           34.9       4.5      12.6        15.3
Effect of prior year non-catastrophe   (7.6)      3.4      (2.1)       1.4
reserve reestimates
Combined ratio                         124.4      107.5    106.5       113.5

A reconciliation of the Esurance brand underlying combined ratio to the
Esurance brand combined ratio is provided in the following table.

                                       Three months ended  Twelve months ended

                                       December 31,        December 31,
                                       2012     2011 ^(1)  2012      2011^(1)
Underlying combined ratio              107.9    101.0      108.2     101.0
Effect of catastrophe losses           2.3      --         1.6       --
Effect of business combination
expenses and the
                                       7.2      20.9       10.1      20.9
 amortizationof purchased
intangible assets
Combined ratio                         117.4    121.9      119.9     121.9
^(1) Represents period from October 7, 2011 to December 31, 2011.

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

($ in millions, except per share data)                      As of December 31,
                                                            2012       2011
Book value per share
Numerator:
Shareholders' equity                                    $ 20,580  $  18,298
Denominator:
Shares outstanding and dilutive potential                  485.5      505.8
sharesoutstanding
Book value per share                                      $ 42.39   $  36.18
Book value per share, excluding the impact of unrealized

 net capital gains and losses on fixed income
securities
Numerator:
Shareholders' equity                                    $ 20,580  $  18,298
Unrealized net capital gains and losses on fixed income   2,549      1,311
securities
Adjusted shareholders' equity                             $ 18,031  $  16,987
Denominator:
Shares outstanding and dilutive potential shares            485.5      505.8
outstanding
Book value per share, excluding the impact of unrealized
net                                                       $ 37.14   $  33.58

 capital gains and losses on fixed income securities

Forward-Looking Statements and Risk Factors

This news release contains forward-looking statements about our outlook for
the Property-Liability combined ratio excluding the effect of catastrophes,
prior year reserve reestimates, business combination expenses, and the
amortization of purchased intangible assets for 2013. 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.

  oPremiums 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.
  oUnanticipated 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.

SOURCE The Allstate Corporation

Website: http://www.allstateinvestors.com
Contact: Maryellen Thielen, Media Relations, (847) 402-5600; or Robert Block,
Investor Relations, (847) 402-2800
 
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