Allstate (ALL)

Allstate’s Capital Position Continues to Improve

“Our proactive approach to risk management and return optimization continues to serve us well.  We improved our investment portfolio mix and produced strong operating results that enabled us to end the year with a strong capital position,” said Don Civgin, senior vice president and chief financial officer.  “Our capital strength puts us in great shape to reinvest in our business to enhance growth and the customer experience.”

Statutory surplus at December 31, 2009 was an estimated $14.9 billion for Allstate Insurance Company, including $3.4 billion at Allstate Life Insurance Company.  This is compared to statutory surplus of $13.0 billion for Allstate Insurance Company at December 31, 2008.  Reflected in the 2009 balances is a capital contribution of $448 million from Allstate Insurance Company to Allstate Life Insurance Company that occurred during the fourth quarter.  There were $3.1 billion in assets available at the holding company level at the end of 2009 to cover the company’s relatively low annual fixed charges.

Book value per share was $30.84 at December 31, 2009 compared to $23.47 at December 31, 2008 and $32.29 at September 30, 2009.  The decline during the fourth quarter of 2009 was related to an increase in unrealized net capital loss, after adjusting for DAC and taxes.  The reduction in pre-tax unrealized net capital losses was more than offset by a decrease in the DAC adjustment due to updated assumptions for Allstate Financial fixed annuity investment performance.  The updated assumptions anticipate continued credit losses in certain asset classes within the portfolio in 2010 and 2011, primarily residential and commercial mortgage-backed securities.

Allstate’s Capital Position Continues to Improve

“We continued to build Allstate’s financial strength this quarter, demonstrated by the 16% improvement in shareholders’ equity to $17.5 billion at September 30,” said Don Civgin, senior vice president and chief financial officer.  “Our improved operating and investment results reflect the prudent and proactive decisions we have made and position Allstate well as the economy continues to slowly improve.”

Statutory surplus at September 30, 2009 was estimated to be $14.8 billion for Allstate Insurance Company, including $3.2 billion at Allstate Life Insurance Company.  There were $3.4 billion in assets available at the holding company level to cover the company’s relatively low annual fixed charges.  Allstate’s 90-day liquidity improved to $33.0 billion in assets that could be sold without significant additional net realized capital losses.