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This excerpt taken from the ALL 8-K filed Feb 10, 2010. Allstate Financial Makes Strong Progress on ‘Focus to Win’
Allstate remains focused on returning Allstate Financial to profitable growth through its Focus to Win restructuring program. During 2009, actions included reducing expenses, shifting fixed costs to variable, and targeting higher product returns. Expense savings initiatives during 2009 delivered approximately 90% of the target of $90 million in annual cost savings.
Pricing actions to produce higher returns and reduce concentrations in products with profits tied to investment performance contributed to a 25.8% decrease in premiums and deposits* in the fourth quarter of 2009 versus the same period of 2008. Premiums and deposits on life products increased 7.2% during the fourth quarter of 2009 when compared to the prior year quarter.
Allstate Financial’s operating income was $95 million in the fourth quarter of 2009. This represented a 6.7% increase from $89 million in the fourth quarter of 2008, primarily due to lower amortization of deferred policy acquisition costs (DAC) and reduced operating expenses, partly offset by lower benefit and investment spreads. The decline in DAC amortization was due to lower investment spreads and a lower amortization rate due to updated assumptions for fixed annuities. Operating expenses decreased 26.6% to $105 million in the fourth quarter of 2009 from $143 million in the same period of 2008, in part reflecting substantial progress made through Focus to Win. The benefit spread declined 30.1% from the prior year quarter to $100 million due to higher mortality experience and non-recurring benefit costs. The investment spread declined 23.0% from the prior year quarter to $107 million due to lower net investment income, partly offset by lower interest credited on contractholder funds.
Allstate Financial’s net loss was $137 million in the fourth quarter of 2009, compared to a net loss of $1.0 billion in the same period of 2008. The improvement related to lower realized net capital losses, after-tax, of $178 million, compared to $736 million in the prior year quarter, and the absence of $493 million of DAC charges incurred in 2008 comprising acceleration in DAC amortization and a non-recurring DAC charge.
This excerpt taken from the ALL 8-K filed Nov 4, 2009. Allstate Financial Makes Strong Progress on ‘Focus to Win’
Allstate Financial continued to make progress on its Focus to Win program by reducing expenses, shifting fixed costs to variable, and targeting higher returns on products. Through September 30, 2009, expense savings initiatives have delivered approximately 80% of the targeted $90 million in annual cost savings by 2011. Premiums and deposits declined 45.5% in the third quarter of 2009 versus the third quarter of 2008 resulting from pricing actions to improve returns and reduce concentration in spread-based products.
Allstate Financial’s operating income was $95 million in the third quarter of 2009. This represented an 8.0% increase from $88 million in the third quarter of 2008, primarily due to improved benefit spread, lower amortization of deferred policy acquisition costs and reduced operating expenses, partly offset by a lower investment spread. The benefit spread increased 49.5% from the prior year quarter to $145 million, driven by improved mortality experience, higher premiums at the Allstate Workplace Division, and increased contract charges on interest-sensitive life insurance products. The investment spread declined during the third quarter
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of 2009 to $109 million versus $214 million in the third quarter of 2008, due to lower net investment income partly offset by lower interest credited on contractholder funds. Operating expenses declined 26.1% to $99 million in the third quarter of 2009 from $134 million in the same period of 2008, reflecting the substantial progress made through Focus to Win.
Allstate Financial’s net loss was $38 million in the third quarter of 2009, compared to a net loss of $196 million in the same period of 2008. Lower realized net capital losses, after-tax, of $151 million, compared to $390 million in the prior year quarter, contributed to the improvement.
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