Allstate Reports 2006 Second Quarter Results; Net Income EPS Increased 10.5%; Operating Income EPS Increased 20.5%

Business Wire, July 19, 2006

NORTHBROOK, Ill. -- The Allstate Corporation (NYSE:ALL) today reported for the second quarter of 2006:

Consolidated Highlights(1)

                                        Three Months Ended June 30,
                                      --------------------------------
                                                          Change
                                                     -----------------
(in millions, except per               Est.
 share amounts and ratios)             2006   2005   $ Amt      %
                                      ------ ------ -------- ---------

Consolidated revenues                 $8,875 $8,791    $84     1.0
Net income                             1,207  1,149     58     5.0
Net income per diluted share            1.89   1.71   0.18    10.5
Operating income(1)                    1,272  1,117    155    13.9
Operating income per diluted share(1)   2.00   1.66   0.34    20.5
Property-Liability combined ratio       82.5   85.2     --    (2.7)
                                                               pts.
Catastrophe losses                       255    146    109    74.7
Book value per share                   32.43  33.48  (1.05)   (3.1)
Return on equity                         9.9   16.1     --    (6.2)
                                                               pts.
Operating income return on equity(1)     9.7   17.3     --    (7.6)
                                                               pts.
----------------------------------------------------------------------

    --  Property-Liability premiums written(1) grew 1.2% over the
        second quarter of 2005, driven by an Allstate brand standard
        auto increase of 3.7%. Excluding the cost of the completed
        Allstate Protection catastrophe reinsurance program and the
        Florida Hurricane Catastrophe Fund ("FHCF"), premiums written
        grew 2.2% in the second quarter compared to the second quarter
        of last year. Policies in force ("PIF") increased 1.2% for
        Allstate Protection, driven by an Allstate brand standard auto
        increase of 2.9% from June 30, 2005 levels.

    --  Property-Liability underwriting income(1) increased $205
        million to $1.20 billion compared to $994 million in the
        second quarter of 2005, driven by increased premiums earned,
        continued favorable auto and homeowners loss frequencies
        excluding catastrophes, and net favorable prior year reserve
        reestimates, partially offset by higher catastrophe losses.

    --  Allstate Financial operating income for the quarter was $160
        million, compared to $137 million in the second quarter of
        2005. Premiums and deposits(1), excluding variable annuities,
        were $3.99 billion, an increase of 11.5% over the second
        quarter of 2005, due primarily to increased fixed annuity
        deposits. In June, we completed the disposal of substantially
        all of our variable annuity business through reinsurance with
        Prudential Financial, Inc.

    --  Book value per share decreased 3.1% compared to June 30, 2005,
        but increased 4.6% compared to December 31, 2005. Book value
        per share, excluding the net impact of unrealized net capital
        gains on fixed income securities(1) was $31.98 at June 30,
        2006, reflecting an increase of 5.2% compared to June 30, 2005
        and 10.0% when compared to December 31, 2005.

    --  Allstate is increasing annual operating income per diluted
        share guidance for 2006 (assuming no additional prior year
        reserve reestimates and average expected catastrophe losses
        for the remainder of the year) to a range of $6.70 to $7.00,
        compared to the previously announced range of $6.00 to $6.40.

(1) Measures used in this release that are not based on accounting principles generally accepted in the United States ("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 was a very strong quarter for Allstate driven by excellent performance of our automobile insurance line of business," said Edward M. Liddy, chairman and chief executive officer, The Allstate Corporation. "Overall, we are growing our business and generating strong profitability while at the same time we are managing down our exposure to catastrophes in the lines of business and areas of the country where the risk is the greatest. Our results this quarter are a good indication that we can effectively accomplish both objectives."

Allstate Property-Liability net premium written was up 1.2 percent compared to second quarter of 2005 with Allstate brand standard auto up 3.7 percent over the prior year's second quarter. Policies in force for standard auto were up 2.9 percent over last year.

"Underwriting income for Allstate Protection was outstanding at $1.2 billion, an increase of 18.4 percent compared to the second quarter of 2005. Automobile accident frequency continues to be favorable. Claim severities were in line with our expectations and general inflation trends," continued Liddy. "The company also had excellent profitability results from the Allstate brand homeowners line, which were driven by favorable claim frequency."