Allstate Reports 22% Increase in 2005 First Quarter Net Income EPS, 16% Increase in First Quarter Operating Income EPS and Record Property-Liability Underwriting Profitability

Business Wire, April 20, 2005

NORTHBROOK, Ill. -- The Allstate Corporation (NYSE:ALL) today reported for the first quarter of 2005:

Consolidated Highlights(1)
                                      Three Months Ended March 31,
                                  ------------------------------------
                                                         Change
                                                   -------------------
(in millions, except per share
 amounts and ratios)                Est.
                                    2005     2004   $ Amt       %
                                  -------- ------- -------- ----------
Consolidated revenues              $8,705  $8,311     $394        4.7
Net income                          1,123     949      174       18.3
Net income per diluted share         1.64    1.34     0.30       22.4
Operating income(1)                 1,140   1,020      120       11.8
Operating income per diluted
 share(1)                            1.67    1.44     0.23       16.0
Property-Liability combined ratio    85.3    86.4       --  (1.1) pts.
Book value per diluted share        31.48   30.48     1.00        3.3
Return on equity                     15.6    15.1       --    0.5 pts.
Operating income return on
 equity(1)                           17.2    18.0       --  (0.8) pts.

--  Property-Liability premiums written(1) grew 3.9% over the first
    quarter of 2004, 4.2% adjusted for reinsurance and accruals for
    premium refunds, driven by an increase in Allstate brand standard
    auto and homeowners premiums written, which grew 5.3% and 8.4%,
    respectively. Allstate brand standard auto and homeowners PIF,
    excluding impacts from Allstate Canada, increased 4.9% and 6.0%,
    respectively, from March 31, 2004 levels.

--  Property-Liability underwriting income(1) increased 13.4% over the
    first quarter of 2004 to $981 million, due to increased premiums
    earned and continued favorable auto and homeowners loss
    frequencies.

--  Pre-tax catastrophe losses totaled $164 million in the first
    quarter of 2005 compared to $102 million in the first quarter of
    2004. The effect of catastrophe losses on the combined ratio was
    2.5 points in the first quarter of 2005 compared to 1.6 points in
    the first quarter of 2004. The effect of catastrophes on net
    income per diluted share was $0.16 in the first quarter of 2005
    compared to $0.09 in the first quarter of 2004. No adjustments
    were made to our previous estimate of losses related to hurricanes
    Charley, Frances, Ivan and Jeanne.

--  Allstate Financial premiums and deposits(1) increased 15.2% over
    the first quarter of 2004 to $3.98 billion. Operating income for
    the quarter was $149 million, an increase of 12.9% over the first
    quarter of 2004.

--  Allstate is confirming annual operating income per diluted share
    guidance for 2005 (assuming the level of average expected
    catastrophe losses used in pricing for the remainder of the year)
    in the range of $5.40 to $5.80.

(1) Measures used in this release that are not based on generally
    accepted accounting principles ("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.

"This is a strong start for Allstate in 2005, " said Edward M. Liddy, Allstate chairman, president, and CEO. " We generated solid net and operating income in this first quarter of 2005 on good revenue growth. Seeking profitable growth is our objective and results this quarter provide more evidence that our focus continues to benefit our shareholders.

"Allstate Protection generated almost $1 billion of underwriting income in the quarter, an increase of more than 13 percent over the first quarter of 2004. Contributing to that record underwriting result was an improvement in frequency trends for both Allstate brand standard auto and homeowners compared to the first quarter of 2004. Premium written for Allstate Protection increased almost 4% over the first quarter of 2004 while premium written for Allstate brand standard auto and homeowners increased 5.3% and 8.4%, respectively, compared to first quarter of 2004. Policies in force (PIF) for Allstate brand standard auto and homeowners grew 4.9 percent and 6 percent, respectively, compared to the first quarter of 2004. Our retention rate in the quarter remained strong and continued near historical highs.

"I remain very encouraged by these excellent results for Allstate Protection. As competition within our industry increases, our Tiered Pricing efforts will continue to serve us well and the new business we bring on our books should generate profitable growth.

"In the first quarter, we began our introduction in certain markets of the next iteration of Tiered Pricing for our auto insurance line. We are also introducing new versions of Tiered Pricing for homeowners and our other lines of business in the coming months. The changes we have made to Tiered Pricing will allow us to segment risks with even more sophistication, which will help us achieve the profitable growth we seek. Through our marketing and advertising, we are continuing to communicate the benefits and advantages Allstate offers customers and are doing so with a more targeted approach. We are also introducing a new auto insurance product that we believe will significantly increase customer choice and further enhance the value proposition Allstate offers to consumers.