Allstate (ALL)

Allstate Protection Catastrophe Management Strategy

We continue to pursue our strategy to manage our property catastrophe exposure to provide our shareholders an acceptable return on the risks assumed in our property business and to reduce the variability of our earnings, while providing protection to our customers.  Although in many areas of the country we are currently achieving returns within acceptable risk tolerances, we continue to seek solutions to improve returns in areas that have known exposure to hurricanes, earthquakes, fires following earthquakes and other catastrophes.  We will continue to pursue this strategy while working to mitigate the impact of our actions on customers.  We are also working for changes in the regulatory environment, including fewer restrictions on underwriting, recognizing the need for and improving appropriate risk based pricing and promoting the creation of government sponsored, privately funded solutions.  Our property business includes personal homeowners, commercial property and other property lines.

Actions we have taken or are considering to attain an acceptable catastrophe exposure level in our property business include:

·                  removing wind coverage from certain policies and allowing our agencies to help customers apply for wind coverage through state facilities such as wind pools;

·                  changes in rates, deductibles and coverage;

·                  limitations on new business writings;

·                  changes to underwriting requirements, including limitations in coastal and adjacent counties;

·                  not offering continuing coverage to some existing policyholders;

·                  purchasing reinsurance or engaging in other forms of risk transfer arrangements;

·                  discontinuing coverage for certain types of residences; and/or

·                  withdrawing from certain geographic markets.