Allstate Posts $923M Net Loss for Q3

[larry]

Allstate Posts $923M Net Loss for Q3
October 23, 2008

Catastrophe losses and the global financial crisis contributed to a
$923 million net loss for the third quarter of 2008, which reflects an
operating loss of $190 million and net realized capital losses of $728
million, The Allstate Corp. reported.

Thomas J. Wilson, chairman, president and CEO, said that hurricane
losses would have been twice as high for the company without its
catastrophe management programs and reinsurance programs put into
place beginning in 2005.

Allstate's operating loss of $190 million for the third quarter of
2008 is primarily attributable to catastrophe pretax losses of $1.8
billion from 35 events, including Hurricanes Ike and Gustav.

The $923 million net loss for the third quarter of 2008 reflects the
operating loss and net realized capital losses of $728 million.

The insurers aid that losses from Hurricanes Ike and Gustav were
mitigated by catastrophe exposure management actions taken over the
last several years, which include reductions in policies in force,
reinsurance and policy changes. Reflecting the combination of reduced
policies in force and ceded wind coverage in the coastal regions of
Texas and Louisiana, at the beginning of the third quarter of 2008,
the company's catastrophe exposure was 42 percent and 33 percent,
respectively, below 2006 levels. Reinsurance recoverables during the
quarter offset losses by $246 million.

Favorable frequency combined with moderate severity to produce an
underlying Property Liability combined ratio of 85.9 for the quarter.

Allstate Financial operating income declined to $88 million in the
third quarter of 2008 from $147 million in the prior year quarter,
reflecting lower investment spreads related to market conditions,
proactive actions taken to improve liquidity and lower benefit
spreads.

"Our investment portfolio initiatives enabled us to avoid large losses
in financial companies and helped protect the value of our equity
investments," Wilson said. "Our property/casualty business continued
to deliver good underlying margins and operating cash flow, which is
extremely important in this economic climate. As a result, Allstate
has maintained strong liquidity and capital positions which protect
our customers and shareholders in these difficult times."