Allstate (ALL)

PROPERTY-LIABILITY 2007 HIGHLIGHTS

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Premiums written, an operating measure that is defined and reconciled to premiums earned on page 54, decreased 1.2% to $27.18 billion in 2007 from $27.53 billion in 2006. Allstate brand

49

standard auto premiums written increased 2.1% to $16.04 billion in 2007 from $15.70 billion in 2006. Allstate brand homeowners premiums written decreased 3.6% to $5.71 billion in 2007 from $5.93 billion in 2006.

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The impact of the cost of the catastrophe reinsurance program on premiums written totaled $896 million in 2007 compared to $607 million in 2006. Excluding this cost, premiums written decreased 0.2% in 2007 from 2006.



•

Premium operating measures and statistics contributing to the overall Allstate brand standard auto premiums written growth were the following:



•

0.9% increase in PIF as of December 31, 2007 compared to December 31, 2006



•

1.5% decrease in new issued applications in 2007 compared to 2006



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0.5 point decline in the renewal ratio to 89.5% in 2007 compared to 90.0% in 2006



•

0.7% increase in the six month policy term average premium to $423 in 2007 from $420 in 2006



•

Premium operating measures and statistics contributing to the overall Allstate brand homeowners premiums written decline were the following:



•

3.4% decrease in PIF as of December 31, 2007 compared to December 31, 2006



•

18.6% decrease in new issued applications in 2007 compared to 2006



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0.8 point decline in the renewal ratio to 86.5% in 2007 compared to 87.3% in 2006



•

2.2% increase in the twelve month policy term average premium to $850 in 2007 from $832 in 2006



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The Allstate brand standard auto loss ratio increased 4.3 points to 65.8 in 2007 from 61.5 in 2006. Standard auto property damage gross claim frequency increased 3.7% in 2007 from 2006, and bodily injury gross claim frequency decreased 1.9% in 2007 from 2006. Auto property damage and bodily injury paid severities increased 1.8% and 6.0%, respectively, in 2007 from 2006.



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The Allstate brand homeowners loss ratio, which includes catastrophes, increased 16.1 points to 66.5 in 2007 from 50.4 in 2006. Homeowner gross claim frequency, excluding catastrophes, increased 7.1% in 2007 from 2006. Homeowners paid severity, excluding catastrophes, increased 10.6% in 2007 from 2006.



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Catastrophe losses in 2007 totaled $1.41 billion compared to $810 million in 2006. Impact of prior year reserve reestimates on catastrophe losses was $127 million unfavorable in 2007 compared to a favorable impact of $223 million in 2006.



•

Prior year net favorable reserve reestimates in 2007 totaled $172 million compared to $971 million in 2006.



•

Underwriting income for Property-Liability was $2.78 billion in 2007 compared to $4.50 billion in 2006. The combined ratio was 89.8 in 2007 compared to 83.6 in 2006. Underwriting income (loss), a measure not based on GAAP, is defined below.



•

Investments as of December 31, 2007 decreased 1.8% from December 31, 2006 and net investment income increased 6.4% in 2007 compared to 2006.

50

•

We introduced innovative products and services such as Allstate® YCA, Allstate® Your Choice Homeowners ("YCH"), Allstate Blue^SM, Allstate Green^SM and Encompass Edge^SM.

PROPERTY-LIABILITY 2007 HIGHLIGHTS

•

Premiums
written, an operating measure that is defined and reconciled to premiums earned on page 54, decreased 1.2% to $27.18 billion in 2007 from
$27.53 billion in 2006. Allstate brand

49

standard
auto premiums written increased 2.1% to $16.04 billion in 2007 from $15.70 billion in 2006. Allstate brand homeowners premiums written decreased 3.6% to $5.71 billion in
2007 from $5.93 billion in 2006.










•

The
impact of the cost of the catastrophe reinsurance program on premiums written totaled $896 million in 2007 compared to $607 million in 2006. Excluding this
cost, premiums written decreased 0.2% in 2007 from 2006.




•

Premium
operating measures and statistics contributing to the overall Allstate brand standard auto premiums written growth were the following:








•

0.9%
increase in PIF as of December 31, 2007 compared to December 31, 2006




•

1.5%
decrease in new issued applications in 2007 compared to 2006




•

0.5
point decline in the renewal ratio to 89.5% in 2007 compared to 90.0% in 2006




•

0.7%
increase in the six month policy term average premium to $423 in 2007 from $420 in 2006







•

Premium
operating measures and statistics contributing to the overall Allstate brand homeowners premiums written decline were the following:








•

3.4%
decrease in PIF as of December 31, 2007 compared to December 31, 2006




•

18.6%
decrease in new issued applications in 2007 compared to 2006




•

0.8
point decline in the renewal ratio to 86.5% in 2007 compared to 87.3% in 2006




•

2.2%
increase in the twelve month policy term average premium to $850 in 2007 from $832 in 2006







•

The
Allstate brand standard auto loss ratio increased 4.3 points to 65.8 in 2007 from 61.5 in 2006. Standard auto property damage gross claim frequency increased 3.7% in
2007 from 2006, and bodily injury gross claim frequency decreased 1.9% in 2007 from 2006. Auto property damage and bodily injury paid severities increased 1.8% and 6.0%, respectively, in 2007 from
2006.




•

The
Allstate brand homeowners loss ratio, which includes catastrophes, increased 16.1 points to 66.5 in 2007 from 50.4 in 2006. Homeowner gross claim frequency, excluding
catastrophes, increased 7.1% in 2007 from 2006. Homeowners paid severity, excluding catastrophes, increased 10.6% in 2007 from 2006.




•

Catastrophe
losses in 2007 totaled $1.41 billion compared to $810 million in 2006. Impact of prior year reserve reestimates on catastrophe losses was
$127 million unfavorable in 2007 compared to a favorable impact of $223 million in 2006.




•

Prior
year net favorable reserve reestimates in 2007 totaled $172 million compared to $971 million in 2006.




•

Underwriting
income for Property-Liability was $2.78 billion in 2007 compared to $4.50 billion in 2006. The combined ratio was 89.8 in 2007 compared to 83.6 in
2006. Underwriting income (loss), a measure not based on GAAP, is defined below.




•

Investments
as of December 31, 2007 decreased 1.8% from December 31, 2006 and net investment income increased 6.4% in 2007 compared to 2006.

50

•

We
introduced innovative products and services such as Allstate® YCA, Allstate® Your Choice Homeowners ("YCH"), Allstate Blue^SM,
Allstate Green^SM and Encompass Edge^SM.