Allstate (ALL)

ALLSTATE FINANCIAL 2008 HIGHLIGHTS

•

Net loss was $1.72 billion in 2008 compared to net income of $465 million in 2007.



•

Net realized capital losses totaled $3.13 billion in 2008 compared to $193 million in 2007.



•

During 2008, we recorded $397 million in accelerated DAC and deferred sales inducement costs ("DSI") amortization related to deferred annuities and interest-sensitive life insurance due to changes in assumptions (which resulted in changes to total EGP). Additional amortization of DAC totaling $336 million was recorded in connection with a premium deficiency assessment for traditional life insurance and immediate annuities with life contingencies primarily due to revised annuity mortality assumptions.



•

Contractholder fund deposits totaled $10.40 billion for 2008 compared to $8.99 billion for 2007.



•

Investments as of December 31, 2008 decreased 17.2% to $61.50 billion from $74.26 billion as of December 31, 2007 and net investment income decreased 11.3% to $3.81 billion in 2008 from $4.30 billion in 2007.



•

Continued focus on improving returns and reducing our concentration in spread based products, primarily fixed annuities and institutional markets products.



•

Launched an initiative that will result in lower operating expenses in 2009 and 2010, and targeting annual savings of $90 million beginning in 2011.

71

ALLSTATE FINANCIAL 2008 HIGHLIGHTS

•

Net loss was $1.72 billion in 2008 compared to net income of $465 million in 2007.




•

Net realized capital losses totaled $3.13 billion in 2008 compared to $193 million in 2007.




•

During 2008, we recorded $397 million in accelerated DAC and deferred sales inducement costs ("DSI") amortization
related to deferred annuities and interest-sensitive life insurance due to changes in assumptions (which resulted in changes to total EGP). Additional amortization of DAC totaling $336 million
was recorded in connection with a premium deficiency assessment for traditional life insurance and immediate annuities with life contingencies primarily due to revised annuity mortality assumptions.




•

Contractholder fund deposits totaled $10.40 billion for 2008 compared to $8.99 billion for 2007.




•

Investments as of December 31, 2008 decreased 17.2% to $61.50 billion from $74.26 billion as of
December 31, 2007 and net investment income decreased 11.3% to $3.81 billion in 2008 from $4.30 billion in 2007.




•

Continued focus on improving returns and reducing our concentration in spread based products, primarily fixed annuities
and institutional markets products.




•

Launched an initiative that will result in lower operating expenses in 2009 and 2010, and targeting annual savings of
$90 million beginning in 2011.

71