THE ALLSTATE CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

($ in millions, except per share data)

	Three months ended

		March 31,				Dec. 31,				Sept. 30,				June 30,				March 31,
		2011				2010				2010				2010				2010

Revenues
Property-liability insurance premiums	$		6,448		$		6,442		$		6,499		$		6,513		$		6,503
Life and annuity premiums and contract charges		569				531				548				545				544
Net investment income		982				998				1,005				1,049				1,050
Realized capital gains and losses:
Total other-than-temporary impairment losses		(156		)		(300		)		(99		)		(288		)		(250		)
Portion of loss recognized in other comprehensive income		(27		)		27				(68		)		(18		)		(5		)
Net other-than-temporary impairment losses recognized in earnings		(183		)		(273		)		(167		)		(306		)		(255		)
Sales and other realized capital gains and losses		279				389				23				(145		)		(93		)
Total realized capital gains and losses		96				116				(144		)		(451		)		(348		)
Total revenues		8,095				8,087				7,908				7,656				7,749

Costs and expenses
Property-liability insurance claims and claims expense		4,476				4,842				4,603				4,714				4,792
Life and annuity contract benefits		454				443				445				485				442
Interest credited to contractholder funds		418				449				445				450				463
Amortization of deferred policy acquisition costs		1,051				1,065				1,006				949				1,014
Operating costs and expenses		838				835				828				789				829
Restructuring and related charges		9				(3		)		9				13				11
Interest expense		92				92				91				92				92
Total costs and expenses		7,338				7,723				7,427				7,492				7,643

(Loss) gain on disposition of operations		(23		)		(1		)		9				2				1

Income from operations before income tax expense (benefit)		734				363				490				166				107

Income tax expense (benefit)		215				67				123				21				(13		)

Net income	$		519		$		296		$		367		$		145		$		120

Earnings per share: (1)

Net income per share - Basic	$		0.98		$		0.55		$		0.68		$		0.27		$		0.22
Weighted average shares - Basic		531.0				539.5				540.9				540.7				540.5

Net income per share - Diluted	$		0.97		$		0.55		$		0.68		$		0.27		$		0.22
Weighted average shares - Diluted		533.6				542.0				543.0				543.0				541.8

Cash dividends declared per share	$		0.21		$		0.20		$		0.20		$		0.20		$		0.20

(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.

THE ALLSTATE CORPORATION

CONTRIBUTION TO INCOME

($ in millions, except per share data)

	Three months ended

		March 31,				Dec. 31,				Sept. 30,				June 30,				March 31,
		2011				2010				2010				2010				2010

Contribution to income

Operating income before the impact of restructuring and related charges	$		503		$		270		$		457		$		450		$		382
Restructuring and related charges, after-tax		(6		)		1				(5		)		(9		)		(7		)

Operating income *		497				271				452				441				375

Realized capital gains and losses, after-tax		63				76				(93		)		(294		)		(226		)
Valuation changes on embedded derivatives that are not hedged, after-tax		8				-				-				-				-
DAC and DSI (amortization) accretion relating to realized capital gains and losses and valuation changes on embedded derivatives that are not hedged, after-tax		(26		)		(43		)		7				4				(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		(9		)		(7		)		(5		)		(7		)		(10		)
(Loss) gain on disposition of operations, after-tax		(15		)		(1		)		6				1				1

Net income	$		519		$		296		$		367		$		145		$		120

Income per share - Diluted (1)

Operating income before the impact of restructuring and related charges	$		0.94		$		0.50		$		0.84		$		0.83		$		0.70
Restructuring and related charges, after-tax		(0.01		)		-				(0.01		)		(0.02		)		(0.01		)

Operating income		0.93				0.50				0.83				0.81				0.69

Realized capital gains and losses, after-tax		0.12				0.14				(0.17		)		(0.53		)		(0.42		)
Valuation changes on embedded derivatives that are not hedged, after-tax		0.02				-				-				-				-
DAC and DSI (amortization) accretion relating to realized capital gains and losses and valuation changes on embedded derivatives that are not hedged, after-tax		(0.05		)		(0.08		)		0.01				-				-
DAC and DSI unlocking relating to realized capital gains and losses, after-tax		-				-				-				-				(0.03		)
Reclassification of periodic settlements and accruals on non-hedge derivative instruments, after-tax		(0.02		)		(0.01		)		-				(0.01		)		(0.02		)
(Loss) gain on disposition of operations, after-tax		(0.03		)		-				0.01				-				-

Net income	$		0.97		$		0.55		$		0.68		$		0.27		$		0.22

Weighted average shares - Diluted		533.6				542.0				543.0				543.0				541.8

(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.

THE ALLSTATE CORPORATION

REVENUES

($ in millions)

	Three months ended

		March 31,				Dec. 31,				Sept. 30,				June 30,				March 31,
		2011				2010				2010				2010				2010

Property-Liability
Property-liability insurance premiums	$		6,448		$		6,442		$		6,499		$		6,513		$		6,503
Net investment income		284				291				284				310				304
Realized capital gains and losses		57				82				(107		)		(106		)		(190		)

Total Property-Liability revenues		6,789				6,815				6,676				6,717				6,617

Allstate Financial
Life and annuity premiums and contract charges		569				531				548				545				544
Net investment income		684				692				707				723				731
Realized capital gains and losses		39				36				(38		)		(353		)		(162		)

Total Allstate Financial revenues		1,292				1,259				1,217				915				1,113

Corporate and Other
Service fees (1)		2				3				2				3				3
Net investment income		14				15				14				16				15
Realized capital gains and losses		-				(2		)		1				8				4

Total Corporate and Other revenues before reclassification of services fees		16				16				17				27				22

Reclassification of service fees (1)		(2		)		(3		)		(2		)		(3		)		(3		)

Total Corporate and Other revenues		14				13				15				24				19

Consolidated revenues	$		8,095		$		8,087		$		7,908		$		7,656		$		7,749

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

THE ALLSTATE CORPORATION

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

($ in millions)

		March 31,				Dec. 31,				Sept. 30,				June 30,				March 31,
		2011				2010				2010				2010				2010

Assets
Investments
Fixed income securities, at fair value (amortized cost $79,292, $78,786, $80,786, $81,425 and $82,486)	$		80,242		$		79,612		$		83,193		$		81,925		$		81,284
Equity securities, at fair value (cost $3,792, 4,228, $3,447, $3,356 and $3,436)		4,437				4,811				3,707				3,254				3,807
Mortgage loans		6,582				6,679				6,961				7,173				7,639
Limited partnership interests		4,077				3,816				3,454				3,119				2,802
Short-term, at fair value (amortized cost $1,986, $3,279, $2,776, $2,414 and $2,482)		1,986				3,279				2,776				2,414				2,482
Other		2,287				2,286				2,123				2,058				2,209
Total investments		99,611				100,483				102,214				99,943				100,223

Cash		641				562				500				711				704
Premium installment receivables, net		4,842				4,839				4,981				4,830				4,823
Deferred policy acquisition costs		4,697				4,769				4,671				5,003				5,186
Reinsurance recoverables, net (1)		6,589				6,552				6,597				6,537				6,415
Accrued investment income		885				809				847				851				904
Deferred income taxes		612				784				670				1,301				1,440
Property and equipment, net		912				921				922				935				954
Goodwill		874				874				874				874				874
Other assets		2,159				1,605				1,799				1,822				1,804
Separate Accounts		8,603				8,676				8,459				8,003				9,059

Total assets	$		130,425		$		130,874		$		132,534		$		130,810		$		132,386

Liabilities
Reserve for property-liability insurance claims and claims expense	$		19,494		$		19,468		$		19,294		$		19,434		$		19,420
Reserve for life-contingent contract benefits		13,552				13,482				13,955				13,483				13,052
Contractholder funds		46,834				48,195				48,936				49,443				51,027
Unearned premiums		9,563				9,800				10,001				9,684				9,575
Claim payments outstanding		761				737				733				733				763
Other liabilities and accrued expenses		6,369				5,564				5,945				6,054				5,992
Long-term debt		5,908				5,908				5,909				5,909				5,910
Separate Accounts		8,603				8,676				8,459				8,003				9,059
Total liabilities		111,084				111,830				113,232				112,743				114,798

Equity
Common stock, 524 million, 533 million, 538 million, 538 million and 538 million shares outstanding		9				9				9				9				9
Additional capital paid-in		3,156				3,176				3,165				3,155				3,152
Retained income		32,377				31,969				31,781				31,552				31,514
Deferred ESOP expense		(42		)		(44		)		(45		)		(44		)		(44		)
Treasury stock, at cost (376 million, 367 million, 362 million, 362 million and 362 million)		(16,173		)		(15,910		)		(15,755		)		(15,760		)		(15,782		)
Accumulated other comprehensive income:
Unrealized net capital gains and losses:
Unrealized net capital losses on fixed income securities with other-than-temporary impairment		(167		)		(190		)		(200		)		(332		)		(384		)
Other unrealized net capital gains and losses		1,186				1,089				1,919				588				(172		)
Unrealized adjustment to DAC, DSI and insurance reserves		60				36				(427		)		72				472
Total unrealized net capital gains and losses		1,079				935				1,292				328				(84		)
Unrealized foreign currency translation adjustments		79				69				54				43				60
Unrecognized pension and other postretirement benefit cost		(1,173		)		(1,188		)		(1,227		)		(1,244		)		(1,265		)
Total accumulated other comprehensive (loss) income		(15		)		(184		)		119				(873		)		(1,289		)
Total shareholders’ equity		19,312				19,016				19,274				18,039				17,560
Noncontrolling interest		29				28				28				28				28
Total equity		19,341				19,044				19,302				18,067				17,588
Total liabilities and equity		130,425			$		130,874		$		132,534		$		130,810		$		132,386

(1) Reinsurance recoverables of unpaid losses related to Property-Liability were $2,134 million, $2,072 million, $2,095 million, $2,176 million and $2,162 million as of March 31, 2011, December 31, 2010, September 30, 2010, June 30, 2010 and March 31, 2010, respectively.

THE ALLSTATE CORPORATION

BOOK VALUE PER SHARE

($ in millions, except per share data )

		March 31,			Dec. 31,			Sept. 30,			June 30,			March 31,
		2011			2010			2010			2010			2010
Book value per share

Numerator:

Shareholders’ equity	$		19,312	$		19,016	$		19,274	$		18,039	$		17,560

Denominator:

Shares outstanding and dilutive potential shares outstanding		529.0			538.4			543.3			542.7			544.3

Book value per share	$		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	$		19,312	$		19,016	$		19,274	$		18,039	$		17,560

Unrealized net capital gains and losses on fixed income securities		678			573			1,138			398			(309		)

Adjusted shareholders’ equity	$		18,634	$		18,443	$		18,136	$		17,641	$		17,869

Denominator:

Shares outstanding and dilutive potential shares outstanding		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	$		35.22	$		34.26	$		33.38	$		32.51	$		32.83

THE ALLSTATE CORPORATION

RETURN ON SHAREHOLDERS’ EQUITY

($ in millions)

	Twelve months ended

		March 31,					Dec. 31,				Sept. 30,			June 30,					March 31,
		2011					2010				2010			2010					2010
Return on Shareholders’ Equity

Numerator:

Net income (1)	$		1,327			$		928		$		1,150	$		1,004			$		1,248

Denominator:

Beginning shareholders’ equity	$		17,560			$		16,692		$		17,505	$		15,068			$		12,242
Ending shareholders’ equity		19,312					19,016				19,274			18,039					17,560

Average shareholders’ equity (2)	$		18,436			$		17,854		$		18,390	$		16,554			$		14,901

Return on shareholders’ equity		7.2			%		5.2			%	6.3		%	6.1			%		8.4			%

Operating Income Return on Shareholders’ Equity *

Numerator:

Operating income (1)	$		1,661			$		1,539		$		1,860	$		1,946			$		1,802

Denominator:

Beginning shareholders’ equity	$		17,560			$		16,692		$		17,505	$		15,068			$		12,242
Unrealized net capital gains and losses		(84		)			(870		)		112			(2,112		)			(3,767		)
Adjusted beginning shareholders’ equity		17,644					17,562				17,393			17,180					16,009

Ending shareholders’ equity		19,312					19,016				19,274			18,039					17,560
Unrealized net capital gains and losses		1,079					935				1,292			328					(84		)
Adjusted ending shareholders’ equity		18,233					18,081				17,982			17,711					17,644

Average adjusted shareholders’ equity (2)	$		17,939			$		17,822		$		17,688	$		17,446			$		16,827

Operating income return on shareholders’ equity		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.

THE ALLSTATE CORPORATION

DEBT TO CAPITAL

($ in millions)

		March 31,					Dec. 31,				Sept. 30,				June 30,					March 31,
		2011					2010				2010				2010					2010

Debt

Long-term debt	$		5,908				5,908			$		5,909		$		5,909			$		5,910

Capital resources

Debt	$		5,908			$		5,908		$		5,909		$		5,909			$		5,910

Shareholders’ equity
Common stock		9					9				9				9					9
Additional capital paid-in		3,156					3,176				3,165				3,155					3,152
Retained income		32,377					31,969				31,781				31,552					31,514
Deferred ESOP expense		(42		)			(44		)		(45		)		(44		)			(44		)
Treasury stock		(16,173		)			(15,910		)		(15,755		)		(15,760		)			(15,782		)
Unrealized net capital gains and losses		1,079					935				1,292				328					(84		)
Unrealized foreign currency translation adjustments		79					69				54				43					60
Unrecognized pension and other postretirement benefit cost		(1,173		)			(1,188		)		(1,227		)		(1,244		)			(1,265		)
Total shareholders’ equity		19,312					19,016				19,274				18,039					17,560

Total capital resources	$		25,220			$		24,924		$		25,183		$		23,948			$		23,470

Ratio of debt to shareholders’ equity		30.6			%		31.1			%	30.7			%	32.8			%		33.7			%

Ratio of debt to capital resources		23.4			%		23.7			%	23.5			%	24.7			%		25.2			%

THE ALLSTATE CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

($ in millions)

	Three months ended

		March 31,			Dec. 31,			Sept. 30,			June 30,			March 31,
		2011			2010			2010			2010			2010

CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	519		$	296		$	367		$	145		$	120
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and other non-cash items		31			39			29			10			16
Realized capital gains and losses		(96	)		(116	)		144			451			348
Loss (gain) on disposition of operations		23			1			(9	)		(2	)		(1	)
Interest credited to contractholder funds		418			449			445			450			463
Changes in:
Policy benefits and other insurance reserves		(58	)		95			(163	)		118			188
Unearned premiums		(248	)		(212	)		307			126			(261	)
Deferred policy acquisition costs		72			44			(68	)		(100	)		30
Premium installment receivables, net		3			147			(146	)		(15	)		24
Reinsurance recoverables, net		(117	)		(36	)		(23	)		(134	)		(72	)
Income taxes		200			22			104			1			73
Other operating assets and liabilities		(21	)		(63	)		(58	)		80			36
Net cash provided by operating activities		726			666			929			1,130			964

CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sales
Fixed income securities		8,363			5,536			8,231			4,184			4,930
Equity securities		642			87			1,216			1,056			1,990
Limited partnership interests		113			118			109			132			146
Mortgage loans		26			3			77			41			3
Other investments		63			23			36			25			37
Investment collections
Fixed income securities		1,201			1,475			1,281			1,269			1,122
Mortgage loans		88			292			146			375			263
Other investments		77			41			52			26			18
Investment purchases
Fixed income securities		(10,207	)		(5,033	)		(8,812	)		(4,801	)		(7,099	)
Equity securities		(144	)		(843	)		(1,220	)		(945	)		(556	)
Limited partnership interests		(334	)		(302	)		(424	)		(431	)		(185	)
Mortgage loans		(26	)		(65	)		(45	)		(9	)		(1	)
Other investments		(58	)		(82	)		(20	)		(36	)		(43	)
Change in short-term investments, net		1,649			(486	)		(335	)		28			411
Change in other investments, net		(119	)		(55	)		(336	)		(79	)		(49	)
Purchases of property and equipment, net		(48	)		(48	)		(45	)		(45	)		(24	)
Disposition of operations		(1	)		-			7			-			-
Net cash provided by (used in) investing activities		1,285			661			(82	)		790			963

CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of long-term debt		-			(1	)		-			(1	)		-
Contractholder fund deposits		596			683			730			739			828
Contractholder fund withdrawals		(2,122	)		(1,691	)		(1,667	)		(2,543	)		(2,569	)
Dividends paid		(107	)		(108	)		(107	)		(108	)		(107	)
Treasury stock purchases		(305	)		(147	)		-			-			(5	)
Shares reissued under equity incentive plans, net		9			2			1			11			14
Excess tax benefits on share-based payment arrangements		(3	)		-			(3	)		(2	)		(2	)
Other		-			(3	)		(12	)		(9	)		6
Net cash used in financing activities		(1,932	)		(1,265	)		(1,058	)		(1,913	)		(1,835	)

NET INCREASE (DECREASE) IN CASH		79			62			(211	)		7			92
CASH AT BEGINNING OF PERIOD		562			500			711			704			612
CASH AT END OF PERIOD	$	641		$	562		$	500		$	711		$	704

THE ALLSTATE CORPORATION

ANALYSIS OF DEFERRED POLICY ACQUISITION COSTS

($ in millions)


		Change in Deferred Policy Acquisition Costs For the three months ended March 31, 2011														Reconciliation of Deferred Policy Acquisition Costs as of March 31, 2011

								Amortization
								relating to		Amortization						DAC before				DAC after
								realized		(acceleration)		Effect of				impact of		Impact of		impact of
		Beginning		Acquisition		Amortization		capital		deceleration		unrealized		Ending		unrealized		unrealized		unrealized
		balance		costs		before		gains and		(charged) credited		capital gains		balance		capital gains		capital gains		capital gains
		Dec. 31, 2010		deferred		adjustments (1) (2)		losses (2)		to income (2)		and losses		March 31, 2011		and losses		and losses		and losses

Property-Liability	$	1,377	$	878	$	(904)	$	-	$	-	$	-	$	1,351	$	1,351	$	-	$	1,351

Allstate Financial:
Traditional life and accident and health		693		41		(32)		-		-		-		702		702		-		702
Interest-sensitive life		2,265		56		(54)		(10)		(17)		(4)		2,236		2,286		(50)		2,236
Fixed annuity		431		6		(14)		(25)		5		2		405		281		124		405
Other		3		-		-		-		-		-		3		3		-		3
Sub-total		3,392		103		(100)		(35)		(12)		(2)		3,346		3,272		74		3,346

Consolidated	$	4,769	$	981	$	(1,004)	$	(35)	$	(12)	$	(2)	$	4,697	$	4,623	$	74	$	4,697

		Change in Deferred Policy Acquisition Costs For the three months ended March 31, 2010														Reconciliation of Deferred Policy Acquisition Costs as of March 31, 2010


								Amortization
								relating to		Amortization						DAC before				DAC after
								realized		deceleration		Effect of				impact of		Impact of		impact of
		Beginning		Acquisition		Amortization		capital		(acceleration)		unrealized		Ending		unrealized		unrealized		unrealized
		balance		costs		before		gains and		credited (charged)		capital gains		balance		capital gains		capital gains		capital gains
		Dec. 31, 2009		deferred		adjustments (1) (2)		losses (2)		to income (2)		and losses		March 31, 2010		and losses		and losses		and losses

Property-Liability	$	1,410	$	872	$	(925)	$	-	$	-	$	-	$	1,357	$	1,357	$	-	$	1,357

Allstate Financial:
Traditional life and accident and health		650		38		(29)		-		-		-		659		659		-		659
Interest-sensitive life		2,246		61		(44)		(2)		13		(65)		2,209		2,176		33		2,209
Fixed annuity		1,159		15		(25)		(1)		(1)		(191)		956		374		582		956
Other		5		-		-		-		-		-		5		5		-		5
Sub-total		4,060		114		(98)		(3)		12		(256)		3,829		3,214		615		3,829

Consolidated	$	5,470	$	986	$	(1,023)	$	(3)	$	12	$	(256)	$	5,186	$	4,571	$	615	$	5,186

(1)	Amortization before adjustments reflects total DAC amortization before amortization/accretion related to realized capital gains and losses and amortization acceleration/deceleration charged/credited to income.
(2)	Included as a component of amortization of DAC on the Consolidated Statements of Operations.

THE ALLSTATE CORPORATION

PROPERTY-LIABILITY RESULTS

($ in millions, except ratios)

	Three months ended

		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,
		2011		2010		2010		2010		2010

Premiums written *	$	6,215	$	6,242	$	6,767	$	6,640	$	6,258
Decrease (increase) in unearned premiums		234		203		(319)		(110)		245
Other		(1)		(3)		51		(17)		-

Premiums earned		6,448		6,442		6,499		6,513		6,503
Claims and claims expense		(4,476)		(4,842)		(4,603)		(4,714)		(4,792)
Amortization of deferred policy acquisition costs		(904)		(924)		(915)		(914)		(925)
Operating costs and expenses		(730)		(726)		(706)		(664)		(704)
Restructuring and related charges		(11)		1		(9)		(14)		(11)
Underwriting income (loss) *		327		(49)		266		207		71

Net investment income		284		291		284		310		304
Periodic settlements and accruals on non-hedge derivative instruments		(4)		(3)		(2)		(1)		(1)
Income tax expense on operations		(180)		(33)		(154)		(148)		(88)

Operating income		427		206		394		368		286

Realized capital gains and losses, after-tax		38		54		(69)		(69)		(123)
(Loss) gain on disposition of operations, after-tax		-		(1)		4		-		-
Reclassification of periodic settlements and accruals on non-hedge derivative instruments, after-tax		3		1		2		-		1
Net income	$	468	$	260	$	331	$	299	$	164

Catastrophe losses	$	333	$	537	$	386	$	636	$	648

Operating ratios *
Claims and claims expense (“loss”) ratio		69.4		75.2		70.8		72.4		73.7
Expense ratio (1)		25.5		25.6		25.1		24.4		25.2
Combined ratio		94.9		100.8		95.9		96.8		98.9

Combined ratio excluding the effect of catastrophes *		89.7		92.5		90.0		87.0		88.9
Effect of catastrophe losses on combined ratio *		5.2		8.3		5.9		9.8		10.0
Combined ratio		94.9		100.8		95.9		96.8		98.9

Combined ratio excluding the effect of catastrophes and prior year reserve reestimates (“underlying”) *		89.9		92.0		89.2		88.1		89.1
Effect of catastrophe losses on combined ratio *		5.2		8.3		5.9		9.8		10.0
Effect of prior year reserve reestimates on combined ratio *		(0.7)		0.1		0.2		(2.3)		(0.4)
Effect of catastrophe losses included in prior year reserve reestimates on combined ratio		0.5		0.4		0.6		1.2		0.2
Combined ratio		94.9		100.8		95.9		96.8		98.9

Effect of restructuring and related charges on combined ratio *		0.2		-		0.1		0.2		0.2

Effect of Discontinued Lines and Coverages on combined ratio		0.1		0.1		0.3		-		0.1

(1)	The increase in the expense ratio in the first quarter of 2011 compared to the first quarter of 2010 is driven by a litigation accrual, marketing costs and lower premiums earned, partially offset by improved operational efficiencies.

THE ALLSTATE CORPORATION

PROPERTY-LIABILITY UNDERWRITING RESULTS BY AREA OF BUSINESS

($ in millions)

	Three months ended

		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,
		2011		2010		2010		2010		2010

Property-Liability Underwriting Summary
Allstate Protection	$	333	$	(45)	$	287	$	209	$	75
Discontinued Lines and Coverages		(6)		(4)		(21)		(2)		(4)
Underwriting income (loss)	$	327	$	(49)	$	266	$	207	$	71

Allstate Protection Underwriting Summary
Premiums written	$	6,216	$	6,241	$	6,767	$	6,640	$	6,258

Premiums earned	$	6,449	$	6,441	$	6,498	$	6,513	$	6,503
Claims and claims expense		(4,472)		(4,838)		(4,582)		(4,713)		(4,790)
Amortization of deferred policy acquisition costs		(904)		(924)		(915)		(914)		(925)
Operating costs and expenses		(729)		(725)		(705)		(663)		(702)
Restructuring and related charges		(11)		1		(9)		(14)		(11)
Underwriting income (loss)	$	333	$	(45)	$	287	$	209	$	75

Catastrophe losses	$	333	$	537	$	386	$	636	$	648

Operating ratios
Loss ratio		69.3		75.1		70.5		72.4		73.6
Expense ratio		25.5		25.6		25.1		24.4		25.2
Combined ratio		94.8		100.7		95.6		96.8		98.8

Effect of catastrophe losses on combined ratio		5.2		8.3		5.9		9.8		10.0

Effect of restructuring and related charges on combined ratio		0.2		-		0.1		0.2		0.2

Discontinued Lines and Coverages Underwriting Summary
Premiums written	$	(1)	$	1	$	-	$	-	$	-

Premiums earned	$	(1)	$	1	$	1	$	-	$	-
Claims and claims expense		(4)		(4)		(21)		(1)		(2)
Operating costs and expenses		(1)		(1)		(1)		(1)		(2)

Underwriting loss	$	(6)	$	(4)	$	(21)	$	(2)	$	(4)

Effect of Discontinued Lines and Coverages on the Property-Liability combined ratio		0.1		0.1		0.3		-		0.1

THE ALLSTATE CORPORATION

PROPERTY-LIABILITY PREMIUMS WRITTEN BY MARKET SEGMENT

($ in millions)

	Three months ended

		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,
		2011		2010		2010		2010		2010

Allstate brand (1)
Standard auto	$	3,984	$	3,843	$	4,028	$	3,948	$	4,023
Non-standard auto		210		203		223		220		237
Auto		4,194		4,046		4,251		4,168		4,260

Involuntary auto		19		22		18		25		16
Commercial lines		120		120		130		137		131
Homeowners		1,225		1,389		1,610		1,565		1,189
Other personal lines		413		408		468		457		399
		5,971		5,985		6,477		6,352		5,995

Encompass brand
Standard auto		144		149		166		169		160
Non-standard auto		1		1		1		1		3
Auto		145		150		167		170		163

Involuntary auto		3		2		3		3		2
Homeowners		79		85		98		94		80
Other personal lines		18		19		22		21		18

		245		256		290		288		263

Allstate Protection		6,216		6,241		6,767		6,640		6,258

Discontinued Lines and Coverages		(1)		1		-		-		-

Property-Liability	$	6,215	$	6,242	$	6,767	$	6,640	$	6,258



Allstate Protection
Standard auto	$	4,128	$	3,992	$	4,194	$	4,117	$	4,183
Non-standard auto		211		204		224		221		240
Auto		4,339		4,196		4,418		4,338		4,423

Involuntary auto		22		24		21		28		18
Commercial lines		120		120		130		137		131
Homeowners		1,304		1,474		1,708		1,659		1,269
Other personal lines		431		427		490		478		417

	$	6,216	$	6,241	$	6,767	$	6,640	$	6,258

(1)

Allstate brand premiums written by the direct channel, excluding Allstate Canada, totaled $206 million, $184 million, $195 million, $181 million and $185 million for the three months ended March 31, 2011, December 31, 2010, September 30, 2010, June 30, 2010 and March 31, 2010, respectively. The increase of 11.4% in the first quarter of 2011 compared to the first quarter of 2010 reflected an impact of profitability management actions taken in New York, Florida, California and North Carolina. The direct channel includes call centers and the internet.

THE ALLSTATE CORPORATION

ALLSTATE PROTECTION MARKET SEGMENT ANALYSIS

($ in millions)

		Three months ended March 31,

		2011		2010		2011		2010		2011		2010		2011		2010	2011	2010	2011	2010	2011	2010	2011	2010

		Premiums earned				Incurred losses				Incurred catastrophe losses				Expenses			Loss ratio (2)		Effect of catastrophe losses on the loss ratio		Expense ratio		Effect of pre-tax reserve reestimates on the combined ratio

Allstate brand
Standard auto	$	3,928	$	3,943	$	2,760	$	2,739	$	18	$	28	$	974	$	985	70.3	69.4	0.5	0.7	24.8	25.0	(0.4)	(0.1)
Non-standard auto		210		230		136		158		-		1		48		56	64.8	68.7	-	0.4	22.8	24.3	(3.3)	(1.3)
Auto		4,138		4,173		2,896		2,897		18		29		1,022		1,041	70.0	69.4	0.4	0.7	24.7	25.0	(0.6)	(0.1)

Homeowners		1,448		1,416		983		1,239		257		525		341		337	67.9	87.5	17.7	37.1	23.5	23.8	(2.7)	(0.4)
Other personal lines (1)		588		592		396		376		41		43		202		173	67.3	63.5	7.0	7.3	34.4	29.2	2.6	(3.9)

Total Allstate brand		6,174		6,181		4,275		4,512		316		597		1,565		1,551	69.2	73.0	5.1	9.7	25.4	25.1	(0.8)	(0.6)

Encompass brand
Standard auto		160		194		121		149		-		2		45		51	75.7	76.8	-	1.0	28.1	26.3	3.1	5.2
Non-standard auto		1		4		1		4		-		-		1		1	100.0	100.0	-	-	100.0	25.0	-	-
Auto		161		198		122		153		-		2		46		52	75.8	77.3	-	1.0	28.5	26.2	3.1	5.1

Homeowners		91		100		60		103		15		46		28		29	65.9	103.0	16.5	46.0	30.8	29.0	1.1	(2.0)
Other personal lines (1)		23		24		15		22		2		3		5		6	65.2	91.7	8.7	12.5	21.8	25.0	(8.7)	4.2

Total Encompass brand		275		322		197		278		17		51		79		87	71.7	86.4	6.2	15.8	28.7	27.0	1.5	2.8

Allstate Protection	$	6,449	$	6,503	$	4,472	$	4,790	$	333	$	648	$	1,644	$	1,638	69.3	73.6	5.2	10.0	25.5	25.2	(0.7)	(0.4)

(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.

THE ALLSTATE CORPORATION

ALLSTATE PROTECTION HISTORICAL MARKET SEGMENT ANALYSIS

($ in millions)

		Three months ended					Three months ended					Three months ended					Three months ended
		March 31, 2011					December 31, 2010					September 30, 2010					June 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	$	3,928	70.3	0.5	24.8	$	3,941	74.6	0.8	25.1	$	3,961	68.7	0.4	24.5	$	3,969	70.1	2.0	24.4
Non-standard auto		210	64.8	-	22.8		216	69.4	0.5	17.6		222	61.7	-	27.5		228	68.9	0.4	26.3
Auto		4,138	70.0	0.4	24.7		4,157	74.4	0.8	24.7		4,183	68.4	0.4	24.6		4,197	70.1	1.9	24.5

Homeowners		1,448	67.9	17.7	23.5		1,431	77.8	30.3	24.2		1,430	80.5	23.1	24.2		1,416	82.6	34.7	21.8
Other personal lines (1)		588	67.3	7.0	34.4		573	75.2	9.1	33.9		591	61.4	4.4	27.3		592	65.7	8.3	28.4

Total Allstate brand		6,174	69.2	5.1	25.4		6,161	75.2	8.4	25.5		6,204	70.5	6.0	24.8		6,205	72.5	10.0	24.3

Encompass brand
Standard auto		160	75.7	-	28.1		164	76.2	1.2	27.5		173	75.7	0.6	30.1		185	73.0	0.5	27.0
Non-standard auto		1	100.0	-	100.0		1	100.0	-	200.0		2	100.0	-	50.0		2	100.0	-	50.0
Auto		161	75.8	-	28.5		165	76.3	1.2	28.5		175	76.0	0.6	30.3		187	73.2	0.5	27.3

Homeowners		91	65.9	16.5	30.8		93	64.5	16.1	30.1		96	63.5	13.5	32.3		96	64.6	15.6	30.2
Other personal lines (1)		23	65.2	8.7	21.8		22	77.3	4.5	22.7		23	60.9	-	30.4		25	64.0	-	20.0

Total Encompass brand		275	71.7	6.2	28.7		280	72.5	6.4	28.6		294	70.7	4.8	31.0		308	69.8	5.2	27.6

Allstate Protection	$	6,449	69.3	5.2	25.5	$	6,441	75.1	8.3	25.6	$	6,498	70.5	5.9	25.1	$	6,513	72.4	9.8	24.4

		Three months ended					Three months ended					Three months ended					Three months ended
		March 31, 2010					December 31, 2009					September 30, 2009					June 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	$	3,943	69.4	0.7	25.0	$	3,944	69.2	(0.3)	24.5	$	3,946	68.6	1.3	24.1	$	3,928	70.7	2.1	24.2
Non-standard auto		230	68.7	0.4	24.3		231	69.3	0.4	25.1		231	63.6	0.4	25.6		240	67.1	1.3	23.7
Auto		4,173	69.4	0.7	25.0		4,175	69.2	(0.3)	24.5		4,177	68.4	1.3	24.1		4,168	70.6	2.1	24.1

Homeowners		1,416	87.5	37.1	23.8		1,411	65.1	20.6	23.9		1,396	75.4	22.3	22.9		1,409	95.1	45.8	21.2
Other personal lines (1)		592	63.5	7.3	29.2		591	66.7	6.6	28.6		601	64.1	4.0	31.6		600	72.5	9.8	25.3

Total Allstate brand		6,181	73.0	9.7	25.1		6,177	68.0	5.1	24.8		6,174	69.5	6.3	24.6		6,177	76.3	12.8	23.6

Encompass brand
Standard auto		194	76.8	1.0	26.3		205	77.5	(0.5)	25.4		221	76.9	0.5	25.4		234	73.5	0.4	26.1
Non-standard auto		4	100.0	-	25.0		5	80.0	-	40.0		6	66.7	-	50.0		7	85.7	-	28.6
Auto		198	77.3	1.0	26.2		210	77.6	(0.5)	25.7		227	76.6	0.4	26.0		241	73.9	0.4	26.1

Homeowners		100	103.0	46.0	29.0		104	57.7	9.6	29.8		108	67.6	15.7	29.6		114	76.3	22.8	28.1
Other personal lines (1)		24	91.7	12.5	25.0		26	88.4	3.8	23.1		26	65.4	-	26.9		28	71.4	3.6	25.0

Total Encompass brand		322	86.4	15.8	27.0		340	72.3	2.9	26.8		361	73.1	5.0	27.2		383	74.4	7.3	26.6

Allstate Protection	$	6,503	73.6	10.0	25.2	$	6,517	68.2	5.0	24.9	$	6,535	69.7	6.2	24.7	$	6,560	76.2	12.5	23.8

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

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
	March 31, 2011 (1)				December 31, 2010				September 30, 2010				June 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)	13	(7)(8)	1.1	4.1	14	(6) (7)	0.4	1.3	21	(7)	0.5	2.8	32	(6) (7)	0.2	0.5
Non-standard auto	3		3.6	18.4	2		0.4	3.2	4		0.7	5.8	5	(6)	2.7	10.9
Auto	15		1.3	4.7	14	(6)	0.4	1.4	24		0.5	2.9	33	(6)	0.3	0.9
Homeowners (3)	12	(6)	1.8	9.9	10		3.2	7.4	15		1.0	4.2	14	(6)	2.0	11.3

Encompass brand
Standard auto	3		4.9	5.0	6		0.1	1.1	12		(0.1)	(1.3)	10		(0.1)	(0.5)
Non-standard auto	-		-	-	-		-	-	-		-	-	-		-	-
Auto	3		4.5	5.0	6		0.1	1.1	12		(0.1)	(1.3)	10		(0.1)	(0.5)
Homeowners	5		0.8	2.9	5		0.1	0.8	8	(6)	-	(0.1)	7		-	(0.3)

	Three months ended			Three months ended			Three months ended				Three months ended
	March 31, 2010			December 31, 2009			September 30, 2009				June 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)	8	0.3	2.9	15	1.5	5.5	15		1.4	6.5	12		0.8	4.3
Non-standard auto	1	0.9	22.1	4	1.1	9.4	4		1.2	5.5	2		0.1	3.2
Auto	9	0.3	3.3	17	1.5	5.6	17		1.4	6.4	13		0.8	4.3
Homeowners (3)	6	0.9	7.4	22	1.9	6.5	19	(6)	2.4	6.9	16		1.7	13.3

Encompass brand
Standard auto	6	1.5	7.1	11	1.3	9.5	13		1.6	9.6	8		1.0	8.3
Non-standard auto	-	-	-	-	-	-	-		-	-	-		-	-
Auto	6	1.4	7.1	11	1.3	9.5	13		1.6	9.6	8		0.9	8.3
Homeowners	5	0.7	5.2	10	0.6	7.9	17		2.0	4.8	10	(6)	0.5	5.7

(1) Rate changes include changes approved based on our net cost of reinsurance. These rate changes do not reflect initial rates filed for insurance subsidiaries initially writing business. Based on historical premiums written in those states, rate changes approved for the three month period ending March 31, 2011 are estimated to total $320 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 1.4%, 0.6%, 0.2%, (0.1)%, 1.5%, 1.6%, 0.5% and 0.6% for the three months ended March 31, 2011, December 31, 2010, September 30, 2010, June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively.

(3) Impacts of Allstate brand homeowners effective rate changes as a percentage of total countrywide prior year-end premiums written were 2.9%, 2.5% 1.0%, 1.7%, 1.5%, 1.5%, 2.4% and 1.7% for the three months ended March 31, 2011, December 31, 2010, September 30, 2010, June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 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 increase in Florida and a 12.0% rate increase in New York in the first quarter of 2011.

THE ALLSTATE CORPORATION

STANDARD AUTO PROFITABILITY MEASURES

	Three months ended

		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,
		2011		2010		2010		2010		2010
Standard auto
($ in millions)
Net premiums written
Allstate brand	$	3,984	$	3,843	$	4,028	$	3,948	$	4,023
Encompass brand		144		149		166		169		160
		4,128		3,992		4,194		4,117		4,183
Net premiums earned
Allstate brand	$	3,928	$	3,941	$	3,961	$	3,969	$	3,943
Encompass brand		160		164		173		185		194
		4,088		4,105		4,134		4,154		4,137
Incurred losses
Allstate brand	$	2,760	$	2,941	$	2,723	$	2,783	$	2,739
Encompass brand		121		125		131		135		149
		2,881		3,066		2,854		2,918		2,888
Expenses
Allstate brand	$	974	$	990	$	970	$	969	$	985
Encompass brand		45		45		52		50		51
		1,019		1,035		1,022		1,019		1,036
Underwriting Income
Allstate brand	$	194	$	10	$	268	$	217	$	219
Encompass brand		(6)		(6)		(10)		-		(6)
		188		4		258		217		213
Loss ratio
Allstate brand (1)		70.3		74.6		68.7		70.1		69.4
Encompass brand		75.7		76.2		75.7		73.0		76.8
Allstate Protection		70.5		74.7		69.1		70.3		69.8
Expense ratio
Allstate brand		24.8		25.1		24.5		24.4		25.0
Encompass brand		28.1		27.5		30.1		27.0		26.3
Allstate Protection		24.9		25.2		24.7		24.5		25.1
Combined ratio
Allstate brand		95.1		99.7		93.2		94.5		94.4
Encompass brand		103.8		103.7		105.8		100.0		103.1
Allstate Protection		95.4		99.9		93.8		94.8		94.9
Effect of catastrophe losses on loss ratio
Allstate brand		0.5		0.8		0.4		2.0		0.7
Encompass brand		-		1.2		0.6		0.5		1.0



Allstate brand standard auto domestic operating measures (2)
		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,
		2011		2010		2010		2010		2010
Operating measures (3)
Policies in force (in thousands)		17,456		17,484		17,479		17,529		17,581
New issued applications (in thousands) (4)		519		526		537		498		464
New items added to existing policies (in thousands) (5)		363		340		394		397		367
Average premium - gross written ($)		439		442		441		444		443
Average premium - net earned ($)		430		433		432		433		430
Renewal ratio (%)		88.9		88.4		88.7		89.0		88.8

Loss trends
(% change year-over-year)
Bodily injury claim frequency		3.1		7.7		7.5		4.2		5.4
Property damage claim frequency		1.2		2.4		3.7		1.9		(0.1)

(1)	In the first quarter of 2011, Florida and New York continue to have a loss ratio higher than countrywide average.
(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 16.6% to 449 thousand in the first quarter of 2011 from 385 thousand in the first quarter of 2010.
(5)	Net increases in insured cars by policy endorsement activity.

THE ALLSTATE CORPORATION

NON-STANDARD AUTO PROFITABILITY MEASURES

	Three months ended

	March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,
	2011		2010		2010		2010		2010
Non-standard auto
($ in millions)
Net premiums written
Allstate brand	$	210	$	203	$	223	$	220	$	237
Encompass brand		1		1		1		1		3
		211		204		224		221		240
Net premiums earned
Allstate brand	$	210	$	216	$	222	$	228	$	230
Encompass brand		1		1		2		2		4
		211		217		224		230		234
Incurred losses
Allstate brand	$	136	$	150	$	137	$	157	$	158
Encompass brand		1		1		2		2		4
		137		151		139		159		162
Expenses
Allstate brand	$	48	$	38	$	61	$	60	$	56
Encompass brand		1		2		1		1		1
		49		40		62		61		57
Underwriting Income
Allstate brand	$	26	$	28	$	24	$	11	$	16
Encompass brand		(1)		(2)		(1)		(1)		(1)
		25		26		23		10		15
Loss ratio
Allstate brand		64.8		69.4		61.7		68.9		68.7
Encompass brand		100.0		100.0		100.0		100.0		100.0
Allstate Protection		64.9		69.6		62.0		69.2		69.2
Expense ratio
Allstate brand		22.8		17.6		27.5		26.3		24.3
Encompass brand		100.0		200.0		50.0		50.0		25.0
Allstate Protection		23.3		18.4		27.7		26.5		24.4
Combined ratio
Allstate brand		87.6		87.0		89.2		95.2		93.0
Encompass brand		200.0		300.0		150.0		150.0		125.0
Allstate Protection		88.2		88.0		89.7		95.7		93.6
Effect of catastrophe losses on loss ratio
Allstate brand		-		0.5		-		0.4		0.4
Encompass brand		-		-		-		-		-


Allstate brand non-standard auto domestic operating measures (1)

	March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,
	2011		2010		2010		2010		2010
Operating measures (2)
Policies in force (in thousands)	627		640		671		706		724
New issued applications (in thousands)	78		63		70		77		99
Average premium - gross written ($)	621		627		630		619		619
Average premium - net earned ($)	579		576		571		573		571
Renewal ratio (%)	70.4		70.5		70.8		72.5		71.8

Loss trends
(% change year-over-year)
Bodily injury claim frequency	2.3		8.1		7.1		1.4		6.6
Property damage claim frequency	0.5		0.3		3.3		0.8		3.1

(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.

THE ALLSTATE CORPORATION

AUTO PROFITABILITY MEASURES

	Three months ended

		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,
		2011		2010		2010		2010		2010
Auto
($ in millions)
Net premiums written
Allstate brand	$	4,194	$	4,046	$	4,251	$	4,168	$	4,260
Encompass brand		145		150		167		170		163
		4,339		4,196		4,418		4,338		4,423
Net premiums earned
Allstate brand	$	4,138	$	4,157	$	4,183	$	4,197	$	4,173
Encompass brand		161		165		175		187		198
		4,299		4,322		4,358		4,384		4,371
Incurred losses
Allstate brand	$	2,896	$	3,091	$	2,860	$	2,940	$	2,897
Encompass brand		122		126		133		137		153
		3,018		3,217		2,993		3,077		3,050
Expenses
Allstate brand	$	1,022	$	1,028	$	1,031	$	1,029	$	1,041
Encompass brand		46		47		53		51		52
		1,068		1,075		1,084		1,080		1,093
Underwriting Income
Allstate brand	$	220	$	38	$	292	$	228	$	235
Encompass brand		(7)		(8)		(11)		(1)		(7)
		213		30		281		227		228
Loss ratio
Allstate brand		70.0		74.4		68.4		70.1		69.4
Encompass brand		75.8		76.3		76.0		73.2		77.3
Allstate Protection		70.2		74.5		68.7		70.2		69.8
Expense ratio
Allstate brand		24.7		24.7		24.6		24.5		25.0
Encompass brand		28.5		28.5		30.3		27.3		26.2
Allstate Protection		24.8		24.8		24.9		24.6		25.0
Combined ratio
Allstate brand		94.7		99.1		93.0		94.6		94.4
Encompass brand		104.3		104.8		106.3		100.5		103.5
Allstate Protection		95.0		99.3		93.6		94.8		94.8
Effect of catastrophe losses on loss ratio
Allstate brand		0.4		0.8		0.4		1.9		0.7
Encompass brand		-		1.2		0.6		0.5		1.0
Effect of pre-tax reserve reestimates on combined ratio*
Allstate brand		(0.6)		(1.2)		(0.9)		(2.1)		(0.1)
Encompass brand		3.1		(6.1)		(1.7)		1.6		5.1


Allstate brand auto domestic operating measures (1)
		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,
		2011		2010		2010		2010		2010
Operating measures (2)
Policies in force (in thousands)		18,083		18,124		18,150		18,235		18,305
New issued applications (in thousands)		597		589		607		575		563
Average premium - gross written ($)		446		449		449		452		451
Average premium - net earned ($)		435		438		437		439		436
Renewal ratio (%)		88.1		88.0		87.9		88.3		88.0

Loss trends
(% change year-over-year)
Bodily injury claim frequency		2.7		7.5		7.3		3.9		5.4
Property damage claim frequency		0.9		2.2		3.6		1.8		-
Paid severity - bodily injury		3.6		(0.2)		1.1		(1.0)		(1.3)
Paid severity - property damage		0.8		(1.7)		1.0		(1.5)		0.4

(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.

THE ALLSTATE CORPORATION

HOMEOWNERS PROFITABILITY MEASURES

		Three months ended

		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,
		2011		2010		2010		2010		2010
Homeowners
($ in millions)
Net premiums written
Allstate brand	$	1,225	$	1,389	$	1,610	$	1,565	$	1,189
Encompass brand		79		85		98		94		80
		1,304		1,474		1,708		1,659		1,269
Net premiums earned
Allstate brand	$	1,448	$	1,431	$	1,430	$	1,416	$	1,416
Encompass brand		91		93		96		96		100
		1,539		1,524		1,526		1,512		1,516
Incurred losses
Allstate brand	$	983	$	1,113	$	1,151	$	1,169	$	1,239
Encompass brand		60		60		61		62		103
		1,043		1,173		1,212		1,231		1,342
Expenses
Allstate brand	$	341	$	346	$	346	$	309	$	337
Encompass brand		28		28		31		29		29
		369		374		377		338		366
Underwriting Income
Allstate brand	$	124	$	(28)	$	(67)	$	(62)	$	(160)
Encompass brand		3		5		4		5		(32)
		127		(23)		(63)		(57)		(192)
Loss ratio
Allstate brand		67.9		77.8		80.5		82.6		87.5
Encompass brand		65.9		64.5		63.5		64.6		103.0
Allstate Protection		67.7		77.0		79.4		81.4		88.5
Expense ratio
Allstate brand		23.5		24.2		24.2		21.8		23.8
Encompass brand		30.8		30.1		32.3		30.2		29.0
Allstate Protection		24.0		24.5		24.7		22.4		24.2
Combined ratio
Allstate brand		91.4		102.0		104.7		104.4		111.3
Encompass brand		96.7		94.6		95.8		94.8		132.0
Allstate Protection		91.7		101.5		104.1		103.8		112.7
Effect of catastrophe losses on loss ratio
Allstate brand		17.7		30.3		23.1		34.7		37.1
Encompass brand		16.5		16.1		13.5		15.6		46.0
Effect of pre-tax reserve reestimates on combined ratio
Allstate brand		(2.7)		(1.8)		5.2		(4.2)		(0.4)
Encompass brand		1.1		5.4		(7.3)		(1.0)		(2.0)



Allstate brand homeowners domestic operating measures (1)
		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,
		2011		2010		2010		2010		2010
Operating measures (2)
Policies in force (in thousands)		6,631		6,690		6,740		6,821		6,886
New issued applications (in thousands)		114		126		140		151		119
Average premium - gross written ($)		975		963		953		933		921
Average premium - net earned ($)		844		825		821		803		795
Renewal ratio (%)		88.3		88.5		88.6		88.3		88.0

Loss trends
(% change year-over-year)
Claim frequency excluding catastrophe losses		1.7		(8.5)		(2.3)		1.7		5.1
Claim severity excluding catastrophe losses		3.5		8.0		2.1		(0.7)		(2.1)

(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.

THE ALLSTATE CORPORATION

PROPERTY-LIABILITY

ALLSTATE BRAND DOMESTIC OPERATING MEASURES AND STATISTICS (1)

	Three months ended

	March 31,	Dec. 31,	Sept. 30,	June 30,	March 31,
	2011	2010	2010	2010	2010
Policies in Force (2)
(in thousands)
Standard auto	17,456	17,484	17,479	17,529	17,581
Non-standard auto	627	640	671	706	724
Auto	18,083	18,124	18,150	18,235	18,305
Homeowners	6,631	6,690	6,740	6,821	6,886

New Issued Applications (3)
(in thousands)
Standard auto	519	526	537	498	464
Non-standard auto	78	63	70	77	99
Auto	597	589	607	575	563
Homeowners	114	126	140	151	119

Average Premium - Gross Written ($) (4)
Standard auto	439	442	441	444	443
Non-standard auto	621	627	630	619	619
Auto	446	449	449	452	451
Homeowners	975	963	953	933	921

Average Premium - Net Earned ($) (5)
Standard auto	430	433	432	433	430
Non-standard auto	579	576	571	573	571
Auto	435	438	437	439	436
Homeowners	844	825	821	803	795

Renewal Ratio (%) (6)
Standard auto	88.9	88.4	88.7	89.0	88.8
Non-standard auto	70.4	70.5	70.8	72.5	71.8
Auto	88.1	88.0	87.9	88.3	88.0
Homeowners	88.3	88.5	88.6	88.3	88.0

Bodily Injury Claim Frequency
(% change year-over-year)
Standard auto	3.1	7.7	7.5	4.2	5.4
Non-standard auto	2.3	8.1	7.1	1.4	6.6
Auto	2.7	7.5	7.3	3.9	5.4

Property Damage Claim Frequency
(% change year-over-year)
Standard auto	1.2	2.4	3.7	1.9	(0.1)
Non-standard auto	0.5	0.3	3.3	0.8	3.1
Auto	0.9	2.2	3.6	1.8	-

Auto Paid Severity
(% change year-over-year)
Bodily injury	3.6	(0.2)	1.1	(1.0)	(1.3)
Property damage	0.8	(1.7)	1.0	(1.5)	0.4

Homeowners Excluding Catastrophe Losses
(% change year-over-year)
Claim frequency	1.7	(8.5)	(2.3)	1.7	5.1
Claim severity	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.

THE ALLSTATE CORPORATION

HOMEOWNERS SUPPLEMENTAL INFORMATION

($ in millions)

		Three months ended March 31, 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	$	23	$	22	95.7%	$	3	13.0%
Other hurricane exposure states		789		601	76.2%		207	26.2%
Total hurricane exposure states (2)		812		623	76.7%		210	25.9%		6	10.8%
Other catastrophe exposure states		727		420	57.8%		62	8.5%		8	5.0%

Total	$	1,539	$	1,043	67.8%	$	272	17.7%	16	14	9.3%

		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.

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	-	-	-	5.2	6,448	333	333	5.2

Average (2)	5.0	6.6	12.9	5.7	7.5				4.3

	Excludes the effect of catastrophe losses relating to
	Hurricane Andrew, California Earthquakes,					Premiums	Total
	and Hawaii Hurricanes (1)					earned	catastrophe
	Quarter 1	Quarter 2	Quarter 3	Quarter 4	Year	year-to-date	losses by year
1992 (3)	3.2	7.0	4.5	2.9	4.4	$ 15,542	$ 681
1993 (3)	5.6	3.0	1.5	5.1	3.8	16,039	607
1994 (3)	5.1	3.8	1.7	2.5	3.2	16,513	535
1995	4.0	7.7	1.8	5.0	4.6	17,540	843
1996	5.1	6.0	6.4	3.8	5.4	18,366	991
1997	2.4	2.6	1.8	0.3	1.8	18,604	329
1998	2.0	6.3	3.9	2.2	3.6	19,307	695
1999	2.6	5.6	5.4	2.3	3.9	20,112	790
2000	7.0	6.7	1.5	1.8	4.3	21,871	930
2001	1.5	8.1	2.5	1.7	3.5	22,197	769
2002	1.8	5.0	1.6	3.6	3.0	23,361	706
2003	2.1	9.0	6.1	6.4	5.9	24,677	1,458
2004	1.6	3.8	26.0	6.2	9.5	25,989	2,468
2005	2.5	2.2	69.4	9.6	21.0	27,039	5,674
2006	1.6	3.7	2.5	4.1	3.0	27,369	810
2007	2.4	6.3	5.0	7.0	5.2	27,233	1,409
2008	8.4	10.3	26.8	3.9	12.4	26,967	3,342
2009	7.8	12.5	6.2	5.0	7.9	26,194	2,069
2010	10.0	9.8	5.9	8.3	8.5	25,957	2,207
2011	5.2	-	-	-	5.2	6,448	333

Average (2)	4.1	6.4	10.8	4.5	6.5

(1) The effect of Catastrophe losses on the combined ratio is presented excluding the effects of those events for which the exposure is now covered by an industry reinsurance or insurance mechanism (i.e., Florida Hurricane Catastrophe Fund and California Earthquake Authority) or with Hawaii hurricanes, coverage is being brokered to a non-affiliated insurance company (see the “Commitments, Guarantees and Contingent Liabilities” footnote to the Consolidated Financial Statements).

(2) The effect of Catastrophes and Catastrophes excluding extraordinary catastrophes on the Combined Ratio calculated as an average for all periods since 1992.

(3) The years 1992-1994 have been adjusted to exclude the premiums earned of the PMI Group, a mortgage guarantee insurer that was sold in 1995.

THE ALLSTATE CORPORATION

ALLSTATE PROTECTION HISTORICAL CATASTROPHE BY SIZE OF EVENT

($ in millions, except ratios)

Three months ended March 31, 2011
											Average

		Number				Claim and			Combined		catastrophe

Size of catastrophe		of events				claim expense			ratio impact		loss per event
Greater than $250 million		-	-	%	$	-	-	%	-	$	-
$101 million to $250 million		-	-			-	-		-		-
$50 million to $100 million		2	12.5			161	48.3		2.5		81
Less than $50 million		14	87.5			206	61.9		3.2		15
Total		16	100.0	%		367	110.2		5.7		23
Prior year reserve reestimates						(34)	(10.2)		(0.5)
Prior quarter reserve reestimates						-	-		-
Total catastrophe losses					$	333	100.0	%	5.2

1995 through March 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 (1)
Hurricane Katrina - 2005	LA				$	3,592	13.7	%	1.0	$	3,592
Hurricane Rita - 2005	TX					891	3.4		0.2		891
Hurricane Ike - 2008	TX					861	3.3		0.2		861
Hurricane Ivan - 2004	FL					632	2.4		0.2		632
Hurricane Charley - 2004	FL					605	2.3		0.2		605
Hurricane Frances - 2004	FL					550	2.1		0.1		550
Hurricane Wilma - 2005	FL					542	2.1		0.1		542
Arizona Hail - 2010	AZ					355	1.4		0.1		355
Hurricane Jeanne - 2004	FL					337	1.3		0.1		337
October 2003 Fires	CA					300	1.1		0.1		300
Hurricane Gustav - 2008	LA					273	1.0		0.1		273
Greater than $250 million		11	1.0	%		8,938	34.1		2.4		813
$101 million to $250 million		20	1.8			3,056	11.6		0.8		153
$50 million to $100 million		56	5.1			3,921	14.9		1.0		70
Less than $50 million		1,013	92.1			10,327	39.4		2.7		10
Total		1,100	100.0	%	$	26,242	100.0	%	6.9		24

(1)

Catastrophe claims and claims expense of $2.26 billion related to Hurricane Andrew of 1992 and $2.08 billion related to the Northridge earthquake of 1994, which were incurred prior to 1995, are excluded from the table above.

THE ALLSTATE CORPORATION

PROPERTY-LIABILITY

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

($ in millions, except ratios)

	Three months ended

		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,
		2011		2010		2010		2010		2010

Pre-tax Reserve Reestimates (1)

Auto	$	(19)	$	(59)	$	(40)	$	(85)	$	5
Homeowners		(38)		(21)		67		(61)		(8)
Other personal lines		13		80		(38)		(5)		(22)

Allstate Protection (2)		(44)		-		(11)		(151)		(25)

Discontinued Lines and Coverages		3		3		22		1		2

Property-Liability	$	(41)	$	3	$	11	$	(150)	$	(23)

Allstate brand	$	(48)	$	5	$	-	$	(152)	$	(34)
Encompass brand		4		(5)		(11)		1		9

Allstate Protection (2)	$	(44)	$	-	$	(11)	$	(151)	$	(25)

Effect of Pre-tax Reserve Reestimates on Combined Ratio (1)

Auto		(0.3)		(0.9)		(0.6)		(1.3)		0.1
Homeowners		(0.6)		(0.3)		1.0		(0.9)		(0.1)
Other personal lines		0.2		1.2		(0.6)		(0.1)		(0.4)

Allstate Protection (2)		(0.7)		-		(0.2)		(2.3)		(0.4)

Discontinued Lines and Coverages		-		0.1		0.4		-		-

Property-Liability		(0.7)		0.1		0.2		(2.3)		(0.4)

Allstate brand		(0.8)		0.1		-		(2.3)		(0.5)
Encompass brand		0.1		(0.1)		(0.2)		-		0.1

Allstate Protection (2)		(0.7)		-		(0.2)		(2.3)		(0.4)

(1)	Favorable reserve reestimates are shown in parentheses.

(2)	Favorable reserve reestimates included in catastrophe losses totaled $34 million and $15 million in the three months ended March 31, 2011 and 2010, respectively.

THE ALLSTATE CORPORATION

ALLSTATE FINANCIAL RESULTS

($ in millions)

	Three months ended

		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,
		2011		2010		2010		2010		2010

Investments	$	60,484	$	61,582	$	62,915	$	61,804	$	62,336

Premiums	$	312	$	273	$	290	$	286	$	289
Contract charges		257		258		258		259		255
Net investment income		684		692		707		723		731
Periodic settlements and accruals on non- hedge derivative instruments		17		13		10		11		17
Contract benefits		(454)		(443)		(445)		(485)		(442)
Interest credited to contractholder funds		(425)		(439)		(446)		(450)		(463)
Amortization of deferred policy acquisition costs		(113)		(86)		(101)		(41)		(58)
Operating costs and expenses (1)		(109)		(115)		(118)		(116)		(120)
Restructuring and related charges		2		2		-		1		-
Income tax expense on operations		(55)		(51)		(47)		(63)		(70)

Operating income		116		104		108		125		139

Realized capital gains and losses, after-tax		25		23		(25)		(230)		(105)
Valuation changes on embedded derivatives that are not hedged, after-tax		8		-		-		-		-
DAC and DSI (amortization) accretion relating to realized capital gains and losses and valuation changes on embedded derivatives that are not hedged, after-tax		(26)		(43)		7		4		(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		(12)		(8)		(7)		(7)		(11)
(Loss) gain on disposition of operations, after-tax		(15)		-		2		1		1

Net income (loss)	$	97	$	76	$	85	$	(107)	$	4

(1)

Operating costs and expenses decreased 9.2% or $11 million in the first quarter of 2011 compared to the same period of 2010, primarily due to increased reinsurance expense allowances, lower occupancy costs due to consolidation of office buildings and non-recurring offsets to certain administrative costs of $4 million, and to a lesser extent, lower non-deferrable commissions and premium tax expenses related to discontinuing sales through banks and broker dealers effective March 31, 2010.

THE ALLSTATE CORPORATION

ALLSTATE FINANCIAL PREMIUMS AND CONTRACT CHARGES

($ in millions)

	Three months ended

		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,
		2011		2010		2010		2010		2010
PREMIUMS AND CONTRACT CHARGES - BY PRODUCT

Underwritten Products
Traditional life insurance premiums	$	108	$	103	$	107	$	104	$	106
Accident and health insurance premiums		161		157		157		151		156
Interest-sensitive life insurance contract charges		248		251		249		249		242
		517		511		513		504		504
Annuities
Immediate annuities with life contingencies premiums		43		13		26		31		27
Other fixed annuity contract charges		9		7		9		10		13
		52		20		35		41		40
Total	$	569	$	531	$	548	$	545	$	544

PREMIUMS AND CONTRACT CHARGES - BY DISTRIBUTION CHANNEL

Allstate agencies	$	251	$	253	$	247	$	247	$	246
Workplace enrolling agents		168		166		166		161		161
Other		150		112		135		137		137
Total	$	569	$	531	$	548	$	545	$	544

THE ALLSTATE CORPORATION

CHANGE IN CONTRACTHOLDER FUNDS

($ in millions)

	Three months ended

		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,
		2011		2010		2010		2010		2010


Beginning balance	$	48,195	$	48,936	$	49,443	$	51,027	$	52,582

Deposits
Fixed annuities		164		180		224		237		291
Interest-sensitive life insurance		329		363		363		391		395
Bank and other deposits		213		246		262		234		252
Total deposits		706		789		849		862		938

Interest credited		410		439		445		448		462

Maturities, benefits, withdrawals and other adjustments
Maturities and retirements of institutional products		(487)		(49)		(3)		(827)		(954)
Benefits		(372)		(365)		(397)		(395)		(395)
Surrenders and partial withdrawals		(1,293)		(1,305)		(1,295)		(1,355)		(1,248)
Contract charges		(251)		(252)		(247)		(243)		(241)
Net transfers from separate accounts		3		3		3		3		2
Fair value hedge adjustments for institutional products		(34)		(23)		24		(74)		(123)
Other adjustments		(43)		22		114		(3)		4
Total maturities, benefits, withdrawals and other adjustments		(2,477)		(1,969)		(1,801)		(2,894)		(2,955)

Ending balance	$	46,834	$	48,195	$	48,936	$	49,443	$	51,027

THE ALLSTATE CORPORATION

ALLSTATE FINANCIAL ANALYSIS OF NET INCOME

($ in millions)

	Three months ended

		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,
		2011		2010		2010		2010		2010

Benefit spread
Premiums	$	312	$	273	$	290	$	286	$	289
Cost of insurance contract charges (1)		162		161		161		159		156
Contract benefits excluding the implied interest on immediate annuities with life contingencies (2)		(319)		(307)		(310)		(346)		(303)
Total benefit spread		155		127		141		99		142

Investment spread
Net investment income		684		692		707		723		731
Implied interest on immediate annuities with life contingencies (2)		(135)		(136)		(135)		(139)		(139)
Interest credited to contractholder funds		(418)		(449)		(445)		(450)		(463)
Total investment spread		131		107		127		134		129

Surrender charges and contract maintenance expense fees (1)		95		97		97		100		99
Realized capital gains and losses		39		36		(38)		(353)		(162)
Amortization of deferred policy acquisition costs		(147)		(141)		(91)		(35)		(89)
Operating costs and expenses		(109)		(115)		(118)		(116)		(120)
Restructuring and related charges		2		2		-		1		-
(Loss) gain on disposition of operations		(23)		(1)		4		2		1
Income tax (expense) benefit on operations		(46)		(36)		(37)		61		4

Net income (loss)	$	97	$	76	$	85	$	(107)	$	4

Benefit spread by product group
Life insurance	$	93	$	78	$	93	$	23	$	88
Accident and health insurance		74		63		65		60		64
Annuities		(12)		(14)		(17)		16		(10)
Total benefit spread	$	155	$	127	$	141	$	99	$	142

Investment spread by product group
Annuities and institutional products	$	48	$	31	$	44	$	54	$	50
Life insurance		11		11		11		6		7
Allstate Bank products		8		7		8		8		8
Accident and health insurance		5		5		5		4		4
Net investment income on investments supporting capital		59		53		59		62		60
Total investment spread	$	131	$	107	$	127	$	134	$	129

(1) Reconciliation of contract charges
Cost of insurance contract charges	$	162	$	161	$	161	$	159	$	156
Surrender charges and contract maintenance expense fees		95		97		97		100		99
Total contract charges	$	257	$	258	$	258	$	259	$	255

(2) Reconciliation of contract benefits
Contract benefits excluding the implied interest on immediate annuities with life contingencies	$	(319)	$	(307)	$	(310)	$	(346)	$	(303)
Implied interest on immediate annuities with life contingencies		(135)		(136)		(135)		(139)		(139)
Total contract benefits	$	(454)	$	(443)	$	(445)	$	(485)	$	(442)

THE ALLSTATE CORPORATION

INVESTMENTS

($ in millions)

	PROPERTY-LIABILITY										ALLSTATE FINANCIAL

		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,
		2011		2010		2010		2010		2010		2011		2010		2010		2010		2010

Fixed income securities, at fair value:
Tax-exempt	$	8,942	$	9,394	$	10,287	$	12,067	$	13,181	$	61	$	62	$	63	$	64	$	64
Taxable		19,126		18,019		19,135		17,089		15,552		49,117		49,872		51,477		50,483		50,246
Equity securities, at fair value		4,199		4,578		3,499		3,063		3,580		238		233		208		191		227
Mortgage loans		16		18		28		38		50		6,566		6,661		6,933		7,135		7,589
Limited partnership interests		2,684		2,506		2,289		2,014		1,744		1,358		1,274		1,128		1,067		1,023
Short-term, at fair value		473		430		454		655		608		874		1,297		1,038		947		1,074
Other		17		103		53		139		94		2,270		2,183		2,068		1,917		2,113
Total	$	35,457	$	35,048	$	35,745	$	35,065	$	34,809	$	60,484	$	61,582	$	62,915	$	61,804	$	62,336

Fixed income securities, at amortized cost:
Tax-exempt	$	8,981	$	9,399	$	9,900	$	11,804	$	13,041	$	59	$	59	$	59	$	60	$	60
Taxable		19,076		17,981		18,853		17,097		15,793		48,224		49,130		49,809		50,301		51,392
Ratio of fair value to amortized cost		100.0%		100.1%		102.3%		100.9%		99.6%		101.9%		101.5%		103.4%		100.4%		97.8%
Equity securities, at cost	$	3,616	$	4,043	$	3,266	$	3,175	$	3,253	$	176	$	185	$	181	$	181	$	183
Short-term, at amortized cost		473		430		454		655		608		874		1,297		1,038		947		1,074


		CORPORATE AND OTHER									CONSOLIDATED

		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,		March 31,		Dec. 31,		Sept 30,		June 30,		March 31,
		2011		2010		2010		2010		2010		2011		2010		2010		2010		2010

Fixed income securities, at fair value:
Tax-exempt	$	706	$	658	$	618	$	613	$	652	$	9,709	$	10,114	$	10,968	$	12,744	$	13,897
Taxable		2,290		1,607		1,613		1,609		1,589		70,533		69,498		72,225		69,181		67,387
Equity securities, at fair value		-		-		-		-		-		4,437		4,811		3,707		3,254		3,807
Mortgage loans		-		-		-		-		-		6,582		6,679		6,961		7,173		7,639
Limited partnership interests		35		36		37		38		35		4,077		3,816		3,454		3,119		2,802
Short-term, at fair value		639		1,552		1,284		812		800		1,986		3,279		2,776		2,414		2,482
Other		-		-		2		2		2		2,287		2,286		2,123		2,058		2,209
Total	$	3,670	$	3,853	$	3,554	$	3,074	$	3,078	$	99,611	$	100,483	$	102,214	$	99,943	$	100,223

Fixed income securities, at amortized cost:
Tax-exempt	$	684	$	637	$	585	$	582	$	619	$	9,724	$	10,095	$	10,544	$	12,446	$	13,720
Taxable		2,268		1,580		1,580		1,581		1,581		69,568		68,691		70,242		68,979		68,766
Ratio of fair value to amortized cost		101.5%		102.2%		103.0%		102.7%		101.9%		101.2%		101.0%		103.0%		100.6%		98.5%
Equity securities, at cost	$	-	$	-	$	-	$	-	$	-	$	3,792	$	4,228	$	3,447	$	3,356	$	3,436
Short-term, at amortized cost		639		1,552		1,284		812		800		1,986		3,279		2,776		2,414		2,482

THE ALLSTATE CORPORATION

UNREALIZED NET CAPITAL GAINS AND LOSSES ON SECURITY PORTFOLIO BY TYPE

($ in millions)

		March 31, 2011					December 31, 2010					September 30, 2010

		Unrealized net			Fair value		Unrealized net			Fair value		Unrealized net			Fair value
		capital gains		Fair	as a percent of		capital gains		Fair	as a percent of		capital gains		Fair	as a percent of
		and losses		value	amortized cost (1)		and losses		value	amortized cost (1)		and losses		value	amortized cost (1)
Fixed income securities
U.S. government and agencies	$	257	$	6,766	103.9	$	276	$	8,596	103.3	$	532	$	11,253	105.0
Municipal		(254)		15,246	98.4		(267)		15,934	98.4		402		16,768	102.5
Corporate		1,300		42,395	103.2		1,395		37,655	103.8		2,334		37,204	106.7
Foreign government		295		3,117	110.5		337		3,158	111.9		482		3,428	116.4
Residential mortgage-backed securities (“RMBS”)		(377)		6,530	94.5		(516)		7,993	93.9		(693)		8,499	92.5
Commercial mortgage-backed securities (“CMBS”)		(103)		2,053	95.2		(219)		1,994	90.1		(382)		1,993	83.9
Asset-backed securities (“ABS”)		(169)		4,111	96.1		(181)		4,244	95.9		(270)		4,010	93.7
Redeemable preferred stock		1		24	104.3		1		38	102.7		2		38	105.6
Total fixed income securities		950		80,242	101.2		826		79,612	101.0		2,407		83,193	103.0

Equity securities		645		4,437	117.0		583		4,811	113.8		260		3,707	107.5
Short-term investments		-		1,986	100.0		-		3,279	100.0		-		2,776	100.0
Derivatives		(30)		512	94.5		(22)		439	95.2		(17)		318	94.9
EMA limited partnership interests (2)		7		N/A	N/A		-		-	-		-		-	-
Unrealized net capital gains and losses, pre-tax	$	1,572	$	87,177	101.8	$	1,387	$	88,141	101.6	$	2,650	$	89,994	103.0

Amounts recognized for:
Insurance reserves (3)		(2)					(41)					(608)
DAC and DSI (4)		95					97					(49)
Amounts recognized		93					56					(657)

Deferred income taxes		(586)					(508)					(701)

Unrealized net capital gains and losses, after-tax	$	1,079				$	935				$	1,292

		June 30, 2010					March 31, 2010					December 31, 2009

		Unrealized net			Fair value		Unrealized net			Fair value		Unrealized net			Fair value
		capital gains		Fair	as a percent of		capital gains		Fair	as a percent of		capital gains		Fair	as a percent of
		and losses		value	amortized cost (1)		and losses		value	amortized cost (1)		and losses		value	amortized cost (1)
Fixed income securities
U.S. government and agencies	$	512	$	9,185	105.9	$	218	$	8,422	102.7	$	203	$	7,536	102.8
Municipal		89		18,849	100.5		(256)		20,148	98.7		(403)		21,280	98.1
Corporate		1,445		35,935	104.2		914		34,499	102.7		345		33,115	101.1
Foreign government		350		3,252	112.1		306		3,314	110.2		291		3,197	110.0
RMBS		(954)		8,961	90.4		(1,231)		9,112	88.1		(1,500)		7,987	84.2
CMBS		(553)		2,132	79.4		(768)		2,452	76.1		(925)		2,586	73.7
ABS		(390)		3,572	90.2		(387)		3,297	89.5		(488)		3,026	86.1
Redeemable preferred stock		1		39	102.6		2		40	105.3		-		39	100.0
Total fixed income securities		500		81,925	100.6		(1,202)		81,284	98.5		(2,477)		78,766	97.0

Equity securities		(102)		3,254	97.0		371		3,807	110.8		179		5,024	103.7
Short-term investments		-		2,414	100.0		-		2,482	100.0		-		3,056	100.0
Derivatives		2		283	100.7		(18)		437	96.0		(23)		548	96.0
Unrealized net capital gains and losses, pre-tax	$	400	$	87,876	100.5	$	(849)	$	88,010	99.0	$	(2,321)	$	87,394	97.4

Amounts recognized for:
Insurance reserves (3)		(292)					-					-
DAC and DSI (4)		403					726					990
Amounts recognized		111					726					990

Deferred income taxes		(183)					39					461

Unrealized net capital gains and losses, after-tax	$	328				$	(84)				$	(870)

(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. Only the unrealized net capital gains and losses on the Allstate Financial fixed annuity and interest-sensitive life product portfolios are used in this calculation. The DAC and DSI adjustment balance, subject to limitations, is determined by applying the DAC and DSI amortization rate to unrealized net capital gains or losses. Recapitalization of the DAC and DSI balances is limited to the originally deferred costs plus interest.

THE ALLSTATE CORPORATION

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

($ in millions)

		As of March 31, 2011

		Par		Amortized		Gross unrealized				Fair	Amortized cost as a percent of		Fair value as a percent
		value (1)		cost		Gains		Losses		value	par value (2)		of par value (2)

Corporate:
Banking	$	4,862	$	4,773	$	114	$	(114)	$	4,773	98.2	%	98.2	%
Utilities		6,544		6,561		399		(67)		6,893	100.3		105.3
Consumer goods (cyclical and non-cyclical)		7,475		7,601		266		(54)		7,813	101.7		104.5
Financial services		4,027		3,973		132		(34)		4,071	98.7		101.1
Capital goods		4,731		4,748		226		(29)		4,945	100.4		104.5
Transportation		1,982		2,003		96		(24)		2,075	101.1		104.7
Technology		1,809		1,829		53		(15)		1,867	101.1		103.2
Basic industry		2,064		2,083		88		(14)		2,157	100.9		104.5
Communications		2,638		2,633		105		(10)		2,728	99.8		103.4
Energy		3,038		3,079		129		(6)		3,202	101.3		105.4
FDIC guaranteed		167		168		2		-		170	100.6		101.8
Other		1,757		1,644		65		(8)		1,701	93.6		96.8
Total corporate fixed income portfolio		41,094		41,095		1,675		(375)		42,395	100.0		103.2

U.S. government and agencies		7,142		6,509		277		(20)		6,766	91.1		94.7
Municipal		18,535		15,500		367		(621)		15,246	83.6		82.3
Foreign government		3,262		2,822		306		(11)		3,117	86.5		95.6
RMBS		7,583		6,907		195		(572)		6,530	91.1		86.1
CMBS		2,179		2,156		63		(166)		2,053	98.9		94.2
ABS		4,574		4,280		82		(251)		4,111	93.6		89.9
Redeemable preferred stock		21		23		1		-		24	109.5		114.3
Total fixed income securities	$	84,390	$	79,292	$	2,966	$	(2,016)	$	80,242	94.0		95.1

(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 $684 million, $1.68 billion, $4.67 billion and $1.36 billion, respectively.

(2)

Excluding the impact of zero-coupon securities, the percentage of amortized cost to par value would be 100.4% for corporates, 101.2% for U.S. government and agencies, 99.7% for municipals and 103.5% for foreign governments. Similarly, excluding the impact of zero-coupon securities, the percentage of fair value to par value would be 103.5% for corporates, 103.0% for U.S. government and agencies, 98.9% for municipals and 108.1% for foreign governments.

THE ALLSTATE CORPORATION

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

($ in millions)

		As of March 31, 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	$	6,766	$	257	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	7,142	$	6,766	$	257

Municipal
Tax exempt		1,401		79		4,185		72		2,382		(10)		1,232		(64)		509		(92)		10,699		9,709		(15)
Taxable		184		-		2,528		2		1,064		(38)		465		(73)		119		(38)		6,566		4,360		(147)
Auction rate securities		811		(48)		61		(6)		99		(13)		102		(11)		104		(14)		1,270		1,177		(92)
Sub-total		2,396		31		6,774		68		3,545		(61)		1,799		(148)		732		(144)		18,535		15,246		(254)

Corporate
Public		1,293		11		3,055		81		9,843		324		9,923		382		2,544		59		25,542		26,658		857
Privately placed		1,047		10		1,947		50		4,220		162		6,608		190		1,915		31		15,552		15,737		443
Sub-total		2,340		21		5,002		131		14,063		486		16,531		572		4,459		90		41,094		42,395		1,300

Foreign government		1,693		224		522		17		535		32		367		22		-		-		3,262		3,117		295

RMBS
U.S. government sponsored entities		3,628		131		-		-		-		-		-		-		-		-		3,430		3,628		131
Prime residential mortgage-backed securities		375		9		69		-		178		(1)		7		-		577		2		1,276		1,206		10
Alt-A residential mortgage-backed securities		15		-		56		-		62		-		41		1		437		(75)		950		611		(74)
Subprime residential mortgage-backed securities		51		-		83		(19)		46		(6)		91		(25)		814		(394)		1,927		1,085		(444)
Sub-total		4,069		140		208		(19)		286		(7)		139		(24)		1,828		(467)		7,583		6,530		(377)

CMBS		1,063		40		284		-		166		(9)		354		(53)		186		(81)		2,179		2,053		(103)

ABS
Collateralized debt obligations		21		-		642		(7)		471		(39)		279		(56)		432		(86)		2,336		1,845		(188)
Consumer and other asset-backed securities		1,305		21		397		2		340		2		199		(1)		25		(5)		2,238		2,266		19
Sub-total		1,326		21		1,039		(5)		811		(37)		478		(57)		457		(91)		4,574		4,111		(169)

Redeemable preferred stock		-		-		1		-		-		-		23		1		-		-		21		24		1
Total fixed income securities	$	19,653	$	734	$	13,830	$	192	$	19,406	$	404	$	19,691	$	313	$	7,662	$	(693)	$	84,390	$	80,242	$	950

(1)

Securities rated below investment grade comprise securities with a rating of Ba or lower. As of March 31, 2011, 62% of our below investment grade gross unrealized losses were concentrated in RMBS, specifically Alt-A and Subprime, and CMBS. The fair value of these securities totaled $1.24 billion, an increase of 2.0%, compared to $1.22 billion as of December 31, 2010, due to improved valuations resulting from tighter credit spreads driven by lower risk premiums. Gross unrealized losses on these securities totaled $571 million as of March 31, 2011, a decrease of 17.0%, compared to $688 million as of December 31, 2010, due to improved valuations, impairment write-downs, sales and principal collections, partially offset by the downgrade of certain securities to below investment grade during the first quarter of 2011.

THE ALLSTATE CORPORATION

PROPERTY-LIABILITY

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

($ in millions)

	Three months ended

		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,
		2011		2010		2010		2010		2010
NET INVESTMENT INCOME
Fixed income securities:
Tax-exempt	$	111	$	118	$	132	$	153	$	165
Taxable		169		154		152		143		130
Equity securities		18		25		16		23		20
Mortgage loans		-		1		-		-		1
Cost limited partnership interests (1)		5		10		3		3		3
Short-term		1		-		1		1		1
Other		1		1		1		5		1
Sub-total		305		309		305		328		321
Less: Investment expense		(21)		(18)		(21)		(18)		(17)
Net investment income	$	284	$	291	$	284	$	310	$	304
Net investment income, after-tax	$	219	$	225	$	225	$	249	$	247

PRE-TAX YIELDS (2)
Fixed income securities:
Tax-exempt		4.8		4.9		4.9		4.9		4.9
Equivalent yield for tax-exempt		7.0		7.1		7.1		7.1		7.1
Taxable		3.6		3.4		3.4		3.5		3.5
Equity securities		1.9		2.7		2.0		2.9		2.0
Mortgage loans		6.7		7.1		4.2		5.4		6.0
Cost limited partnership interests		2.9		5.8		2.0		1.8		2.4
Total portfolio (3)		3.7		3.8		3.7		3.9		3.8

REALIZED CAPITAL GAINS AND LOSSES (PRE-TAX) BY ASSET TYPE
Fixed income securities:
Tax-exempt	$	(13)	$	(29)	$	76	$	(23)	$	(4)
Taxable		(29)		(11)		25		6		(43)
Equity securities		124		10		68		25		14
Limited partnership interests		46		44		(13)		15		(7)
Derivatives and other		(71)		68		(263)		(129)		(150)
Total	$	57	$	82	$	(107)	$	(106)	$	(190)

REALIZED CAPITAL GAINS AND LOSSES (PRE-TAX) BY TRANSACTION TYPE
Impairment write-downs	$	(64)	$	(63)	$	(57)	$	(96)	$	(79)
Change in intent write-downs (4)		(27)		(33)		(10)		(10)		(9)
Net other-than-temporary impairment losses recognized in earnings		(91)		(96)		(67)		(106)		(88)
Sales (4)		172		65		228		121		41
Valuation of derivative instruments		26		47		(143)		(134)		(101)
Settlements of derivative instruments		(95)		21		(118)		3		(49)
EMA limited partnership income		45		45		(7)		10		7
Total	$	57	$	82	$	(107)	$	(106)	$	(190)

AVERAGE INVESTED ASSETS (in billions) (5)	$	34.7	$	34.7	$	34.9	$	34.8	$	34.6

(1)	At March 31, 2011, Property-Liability has commitments to invest in additional limited partnership interests totaling $915 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 includes fixed income and equity securities, mortgage loans, cost limited partnership interests, short-term and other investments.
(4)	Includes $3 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 March 31, 2011.
(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.

THE ALLSTATE CORPORATION

ALLSTATE FINANCIAL

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

($ in millions)

	Three months ended

		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,
		2011		2010		2010		2010		2010

NET INVESTMENT INCOME
Fixed income securities	$	607	$	614	$	631	$	646	$	652
Equity securities		1		2		1		2		1
Mortgage loans		89		89		92		99		103
Cost limited partnership interests (1)		5		11		3		4		3
Short-term		1		-		1		-		1
Other		9		5		3		-		(2)
Sub-total		712		721		731		751		758
Less: Investment expense		(28)		(29)		(24)		(28)		(27)
Net investment income	$	684	$	692	$	707	$	723	$	731
Net investment income, after-tax	$	449	$	453	$	463	$	473	$	478

PRE-TAX YIELDS (2)
Fixed income securities		5.0		5.0		5.0		5.1		5.1
Equity securities		3.3		3.6		2.8		3.5		2.3
Mortgage loans		5.4		5.3		5.2		5.4		5.3
Cost limited partnership interests		2.7		7.0		1.8		3.3		1.9
Total portfolio (3)		4.8		4.8		4.8		4.8		4.8

REALIZED CAPITAL GAINS AND LOSSES (PRE-TAX) BY ASSET TYPE
Fixed income securities	$	15	$	(85)	$	(19)	$	(177)	$	(92)
Equity securities		(2)		1		15		20		-
Mortgage loans		(4)		(17)		(1)		(28)		(25)
Limited partnership interests		22		28		(6)		9		(15)
Derivatives and other		8		109		(27)		(177)		(30)
Total	$	39	$	36	$	(38)	$	(353)	$	(162)

REALIZED CAPITAL GAINS AND LOSSES (PRE-TAX) BY TRANSACTION TYPE
Impairment write-downs	$	(50)	$	(134)	$	(80)	$	(143)	$	(144)
Change in intent write-downs		(42)		(42)		(20)		(57)		(23)
Net other-than-temporary impairment losses recognized in earnings		(92)		(176)		(100)		(200)		(167)
Sales		111		68		89		18		44
Valuation of derivative instruments		(4)		99		10		(149)		(54)
Settlements of derivative instruments		6		14		(34)		(30)		19
EMA limited partnership income		18		31		(3)		8		(4)
Total	$	39	$	36	$	(38)	$	(353)	$	(162)

AVERAGE INVESTED ASSETS (in billions) (4)	$	60.2	$	61.0	$	61.4	$	62.5	$	63.9

(1)	At March 31, 2011, Allstate Financial has commitments to invest in additional limited partnership interests totaling $736 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.

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,

- 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 Measures

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

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

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.

		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

Property-Liability Operations
	Property-Liability Results	10
	Underwriting Results by Area of Business	11
	Premiums Written by Market Segment	12
	Allstate Protection Market Segment Analysis	13
	Allstate Protection Historical Market Segment Analysis	14
	Historical Impact of Net Rate Changes Approved on Premiums Written	15
	Standard Auto Profitability Measures	16
	Non-standard Auto Profitability Measures	17
	Auto Profitability Measures	18
	Homeowners Profitability Measures	19
	Allstate Brand Domestic Operating Measures and Statistics	20
	Homeowners Supplemental Information	21
	Effect of Catastrophe Losses on the Combined Ratio	22
	Allstate Protection Historical Catastrophe by Size of Event	23
	Effect of Pre-tax Prior Year Reserve Reestimates on the Combined Ratio	24
	Asbestos and Environmental Reserves	25

Allstate Financial Operations and Reconciliations
	Allstate Financial Results	26
	Premiums and Contract Charges	27
	Change in Contractholder Funds	28
	Analysis of Net Income	29
	Allstate Financial Weighted Average Investment Spreads	30

Corporate and Other Results		31

Investments
	Investments	32
	Unrealized Net Capital Gains and Losses on Security Portfolio by Type	33
	Gross Unrealized Gains and Losses on Fixed Income Securities by Type and Sector	34
	Fair Value and Unrealized Net Capital Gains and Losses for Fixed Income Securities by Credit Rating	35
	Realized Capital Gains and Losses by Transaction Type	36
	Property-Liability Net Investment Income, Yields and Realized Capital Gains and Losses (Pre-tax)	37
	Allstate Financial Net Investment Income, Yields and Realized Capital Gains and Losses (Pre-tax)	38

Definitions of Non-GAAP and Operating Measures		39

		Three months		Twelve months ended December 31,
		ended
		March 31,
		2011		2010		2009		2008		2007		2006
(net of reinsurance)

Asbestos claims
Beginning reserves	$	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		(9)		(85)		(40)		(82)		(90)		(84)
Ending reserves	$	1,091	$	1,100	$	1,180	$	1,228	$	1,302	$	1,375

Claims and claims expense paid as a percent of ending reserves		0.8%		7.7%		3.4%		6.7%		6.9%		6.1%

Environmental claims
Beginning reserves	$	201	$	198	$	195	$	232	$	194	$	205
Incurred claims and claims expense		-		18		13		-		63		10
Claims and claims expense paid		(8)		(15)		(10)		(37)		(25)		(21)
Ending reserves	$	193	$	201	$	198	$	195	$	232	$	194

Claims and claims expense paid as a percent of ending reserves		4.1%		7.5%		5.1%		19.0%		10.8%		10.8%

	Three months ended March 31, 2011						Three months ended March 31, 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	5.4	%	4.2	%	1.2	%	5.4	%	4.4	%	1.0	%
Deferred fixed annuities and institutional products	4.5		3.3		1.2		4.4		3.2		1.2
Immediate fixed annuities with and without life contingencies	6.2		6.2		-		6.3		6.4		(0.1)
Investments supporting capital, traditional life and other products	3.7		N/A		N/A		3.6		N/A		N/A