1. NEWS
FOR IMMEDIATE RELEASE
Contact: Mary Alice Horstman
Media Relations
(847) 402-5600
Robert Block
Larry Moews
Phil Dorn
Investor Relations
(847) 402-2800
Allstate Reports 2001 Third Quarter Results
NORTHBROOK, Ill., October 18, 2001 -- The Allstate Corporation (NYSE: ALL)
today reported operating income per diluted share of $.56 for the third quarter of
2001 compared to $.71 for the third quarter of 2000. The decline was driven by
increased loss costs in the Property-Liability business, a principal contributor
being the homeowners line, and losses sustained from the September 11
tragedy.
“The quarter continued to see strong growth in our standard auto line, and
Allstate Financial experienced its second highest quarter in operating income,”
said Chairman, President and CEO Edward M. Liddy. “As detailed in our pre-
earnings release of October 10th
, we remain concerned about the adverse loss
trends in our homeowners line and are taking strong action to deal with this
situation.”
“We, along with the rest of the property and casualty sector, have been
experiencing severity pressures for some time, and in addition our frequency
trends for the year to date are running ahead of 2000. These two factors
adversely affected our homeowners results. We are aggressively moving to
remedy this situation, and are making a number of adjustments to improve the
profitability of the homeowners line. The initiatives include changes to our
product design, underwriting approach and appropriate premium rates, and have
been carefully designed to target the specific needs of specific markets. While
we have made good progress, we are monitoring our claims experience carefully
and will continue to take appropriate actions to ensure that our homeowners line

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operates at a more acceptable level over the long-term. However, it will be some
time before we see the full effect of these initiatives, because many of these
actions take time to implement and because the homeowners policies renew on
an annual basis.
“The Good Hands SM
Network continues to make progress, and during the
quarter was rolled out to nine additional states. The integrated channel model
has now gone live in 27 states and the District of Columbia. We remain on
schedule to reach substantially all of the United States population by the end of
this year."
Operating income was $401 million in the third quarter of 2001, compared to
$525 million in the third quarter of 2000. Catastrophe losses, which include the
Property-Liability losses related to the September 11 tragedy, were $93 million
after-tax during the quarter, compared to $62 million in the prior year period.
Consolidated net income for the quarter was $226 million or $.32 per diluted
share, compared to $644 million or $.87 per diluted share for the same period in
2000. The decline in consolidated net income reflects both decreased operating
income in the Property-Liability business and realized capital losses resulting
from market conditions affecting portfolio trading, the valuation of derivative
securities resulting from new accounting standards adopted in 2001 and
investment write-downs. Consolidated realized capital losses for the third quarter
of 2001 were $131 million after-tax compared to realized capital gains of $129
million after-tax in the same period last year.
For the nine months ended September 30, 2001, operating income was $1.18
billion ($1.63 per diluted share), catastrophe losses after-tax were $495 million
and net income was $894 million ($1.23 per diluted share), compared to
operating income of $1.42 billion ($1.89 per diluted share), catastrophe losses
after-tax of $549 million and net income of $1.66 billion ($2.21 per diluted share)
in the first nine months of 2000. Consolidated realized capital losses were $211
million after-tax through September of 2001, compared to realized capital gains
of $276 million after-tax for the first nine months of 2000.
Property-Liability Business
Property-Liability written premiums increased 3.6 percent in the third quarter of
2001 to $5.85 billion compared to $5.64 billion during the same period of 2000.
For Allstate brand products, written premiums increased 4.6 percent compared to

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the same period in the prior year, as rate increases taken during 2000 and 2001
began to take effect. For the Ivantage brand products, which include
EncompassSM
Insurance and DeerbrookSM
Insurance, written premium declined
7.0 percent in the third quarter of 2001 as compared to the prior year quarter, as
profit improvement actions continued to impact production in these businesses.
“As discussed last quarter, the growth in the Allstate brand standard book
continues to be strong, with both standard auto and homeowners showing an
increase in written premium in excess of 6 percent this quarter compared to the
previous year,” Liddy said. “In standard auto, the growth rate of 6.4 percent
accelerated from the previous quarter’s growth rate of 4.8 percent, and the
growth rate for the nine months to September 30 is 5.4 percent. We have seen
increases in average premiums, resulting from the rate actions taken over the
past twelve months, as well as positive production and retention trends.”
Property-Liability revenues in the third quarter of 2001 were $5.90 billion
compared to $6.12 billion for the 2000 third quarter. Operating income for the
quarter was $290 million versus 2000 third quarter operating income of $408
million, as increased premiums were more than offset by higher loss costs. Loss
costs included a reserve increase in the quarter totaling $80 million after-tax,
primarily related to the homeowners line, and $22 million after-tax related to the
September 11 tragedy.
The combined ratio for the quarter was 103.0, compared to the 2000 third quarter
ratio of 98.6. Excluding catastrophe losses and restructuring charges, the
combined ratio was 100.4, compared to 96.5 in the third quarter of 2000.
Property-Liability realized capital losses were $85 million after-tax in the third
quarter of 2001, compared to realized capital gains of $119 million after-tax for
the same period in 2000. Net income was $171 million for the quarter, compared
to $527 million for the same period in the previous year.
For the first nine months of 2001, Property-Liability written premiums increased
2.5 percent to $17.01 billion compared to $16.60 billion in the first nine months of
2000. Revenues for the first nine months of 2001 were $17.76 billion, operating
income was $869 million, realized capital losses were $79 million after-tax and
net income was $747 million, compared to revenues of $18.26 billion, operating
income of $1.05 billion, realized capital gains of $329 million after-tax and net
income of $1.38 billion in the first nine months of 2000.

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Allstate Financial Business
For the third quarter of 2001, statutory premiums and deposits were $2.49 billion
compared to $3.34 billion in the third quarter of 2000. Significant decreases in
retail sales of variable annuities, due to equity market volatility, and institutional
product sales, versus a strong prior year quarter, drove the decline. Allstate
Financial continues to see strong growth in the sale of worksite, life and
retirement products through Allstate agencies. GAAP revenues during the third
quarter of 2001 were $1.26 billion, compared to $1.30 billion for the same period
in the previous year.
Allstate Financial operating income for the quarter was $134 million versus $133
million for the comparable 2000 period. Increased gross investment margin
offset the impact of equity market volatility on variable account assets and related
fees and benefits. Mortality losses of $10 million after-tax related to the
September 11 tragedy more than offset otherwise positive mortality for the
quarter.
“Operating income improved despite a difficult economic environment,” Liddy
said. “With continued volatility expected in the equity markets over the short to
mid-term, Allstate Financial continues to take actions to increase its investment
spread and to better align its expenses and investments in growth initiatives with
current economic and market conditions”.
Net income for the third quarter of 2001 was $88 million compared to $144
million for the third quarter of 2000, reflecting realized capital losses in the
current year quarter compared to realized capital gains in the prior year.
Allstate Financial statutory premiums and deposits for the first nine months of
2001 were $8.29 billion, revenues were $3.68 billion, operating income was $380
million, realized capital losses were $133 million after-tax and net income was
$241 million. These totals compare to statutory premiums and deposits of $9.58
billion, revenues of $3.61 billion, operating income of $405 million, realized
capital losses of $29 million after-tax and net income of $376 million for the first
nine months of 2000.

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This press release contains a forward-looking statement about the steps Allstate
has taken to address adverse loss trends in its homeowners insurance business
and the effect that those steps will have over the long term. The statement is
subject to the Private Securities Litigation Reform Act of 1995 and is based on
management’s estimates, assumptions and projections. While management
believes that the changes to product design, underwriting approach and premium
rates that it has initiated will have a positive effect on the adverse loss trend over
the long term, the trend could continue due to a variety of factors, including
unforeseen flaws in Allstate’s pricing model.
The Allstate Corporation (NYSE: ALL) is the nation’s largest publicly held
personal lines insurer. Widely known through the “You’re In Good Hands With
Allstate®” slogan, Allstate provides insurance products to more than 14 million
households and has approximately 13,000 exclusive agents in the U.S. and
Canada. Customers can access Allstate products and services through Allstate
agents, or in select states at allstate.com and 1-800-Allstate. Encompasssm
and
Deerbrooksm
Insurance brand property and casualty products are sold exclusively
through independent agents. Allstate Financial Group includes the businesses
that provide life insurance, retirement and investment products, through Allstate
agents, workplace marketing, independent agents, banks and securities firms.
The Allstate Corporation prepares an interim investor supplement, containing
standard information that is not available at the time of the earnings release. A
supplement will be posted to the company’s website in approximately 10 days,
and can be accessed by going to the Allstate web site at allstate.com and
clicking on “About Allstate”. From there, go to the “Find Financial Information”
button.

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Summary of results for the quarter and nine months ended September 30, 2001:
Consolidated Highlights
Quarter Ended
September 30
Nine Months Ended
September 30
($ in millions, except per-share amounts) Est.
2001
$
2000
$
Change
%
Est.
2001
$
2000
$
Change
%
Consolidated Revenues 7,173 7,445 (3.7) 21,507 21,914 (1.9)
Operating Income Before Restructuring
Charges 407 537 (24.2) 1,197 1,453 (17.6)
Operating Income Per Share (Diluted)
Before Restructuring Charges .57 .72 (20.8) 1.65 1.93 (14.5)
Restructuring Charges After-tax 6 12 (50.0) 14 33 (57.6)
Operating Income 401 525 (23.6) 1,183 1,420 (16.7)
Operating Income Per Share (Diluted) .56 .71 (21.1) 1.63 1.89 (13.8)
Realized Capital (Losses) Gains After-tax (131) 129 -- (211) 276 (176.4)
Loss on Disposition of Operations (34) -- -- (40) -- --
Dividends on Preferred Securities of
Subsidiary Trusts (10) (10) -- (29) (32) (9.4)
Cumulative Effect of a Change in
Accounting Principle After-tax -- -- -- (9) -- --
Net Income 226 644 (64.9) 894 1,664 (46.3)
Net Income per share (Diluted) .32 .87 (63.2) 1.23 2.21 (44.3)
Weighted Average Shares Outstanding
(Diluted) 719.7 740.6 (2.8) 726.2 753.4 (3.6)

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• For the third quarter of 2001, consolidated revenues were $7.17 billion,
compared to $7.45 billion in the third quarter of 2000. This decrease was due
to increased Property-Liability premiums earned and Allstate Financial
premiums and contract charges being more than offset by realized capital
losses in the third quarter of 2001 as compared to realized capital gains in the
third quarter of 2000.
• Property-Liability written premiums totaled $5.85 billion during the third
quarter of 2001 versus $5.64 billion during the same period in 2000. Allstate
brand written premiums totaled $5.38 billion during the third quarter of 2001,
an increase from $5.14 billion during the same period of 2000, due to
increased average premium and unit growth in Allstate’s standard auto and
homeowners lines. Ivantage brand written premiums totaled $467 million
during the third quarter of 2001, a decrease from $502 million during the
same period of 2000 due to decreases in Ivantage’s standard and non-
standard auto lines, as a result of profit improvement actions.
• Through the first nine months of 2001 the following net rate changes have
been approved:
Allstate brand:
 Standard auto has received approval in 34 states and Washington DC
with a projected average premium written increase in those states of 4.7%
on an annual basis.
 Non-standard auto has received approval in 37 states and Washington DC
with a projected average premium written increase in those states of
11.3% on an annual basis.
 Homeowners has received approval in 27 states and Washington DC with
a projected average premium written increase in those states of 12.1% on
an annual basis.
Ivantage brand:
 Standard auto (Encompass) has received approval in 30 states with a
projected average premium written increase in those states of 2.0% on an
annual basis.
 Non-standard auto (Deerbrook) has received approval in 9 states with a
projected average premium written increase in those states of 13.8% on
an annual basis.

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 Homeowners (Encompass) has received approval in 27 states with a
projected average premium written increase in those states of 3.8% on an
annual basis.
• Allstate completed an annual review of reserves for environmental, asbestos
and other mass tort exposures during the third quarter of 2001. As a result of
this review, reserve increases were taken for asbestos totaling $61 million
after-tax, offset by reserve releases for environmental of $30 million after-tax
and other mass tort of $25 million after-tax, for a net impact of $6 million after-
tax in the third quarter.
• Allstate Financial operating income was $134 million during the third quarter
of 2001 compared to $133 million in the same period of 2000. Increased
gross investment margin offset the impact of equity market volatility on
variable account assets and related fees and benefits. Mortality losses of $10
million after tax related to the September 11 tragedy more than offset
otherwise positive mortality for the quarter.
• During the third quarter of 2001, the components of net realized capital
(losses) gains were:
(in millions) Property-Liability Allstate
Financial
Total
Valuation of derivative securities (25) (52) (77)
Portfolio trading (93) 9 (84)
Investment write-downs (16) (27) (43)
Third Quarter 2001 before tax
Realized Capital Losses (134) (70) (204)
• During the third quarter of 2001, Allstate finalized the sale of its subsidiaries in
Germany and Italy recognizing a $34 million after-tax loss on the disposition
of operations. Related to this sale, Allstate also recognized a $47 million tax
benefit attributable to the inception-to-date operating losses of these entities,
not previously recognized. The sales of these subsidiaries, along with the
sale of subsidiaries in the Philippines and Indonesia in the second quarter of
2001, reflect Allstate’s intention to focus its efforts on business in North
America.

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• During the third quarter of 2001, the company acquired approximately 11
million shares of its stock at a cost of $380 million. These repurchases
completed its $2 billion stock repurchase program which began in 2000, and
began the current $500 million stock repurchase program which is expected
to be completed by the end of 2002. The total cost of shares repurchased
during the quarter was $363 million in the $2 billion program and $17 million
under the current $500 million program.

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Property-Liability Highlights
Quarter Ended
September 30
Nine Months Ended
September 30
($ in millions, except ratios) Est.
2001
$
2000
$
Change
%
Est.
2001
$
2000
$
Change
%
Property-Liability Premiums Written 5,846 5,644 3.6 17,014 16,604 2.5
Property-Liability Revenues 5,895 6,116 (3.6) 17,759 18,257 (2.7)
Operating Income before Restructuring
Charges 295 421 (29.9) 879 1,094 (19.7)
Restructuring Charges After-tax 5 13 (61.5) 10 42 (76.2)
Operating Income 290 408 (28.9) 869 1,052 (17.4)
Realized Capital (Losses) Gains After-tax (85) 119 (171.4) (79) 329 (124.0)
Loss on Disposition of Operations (34) -- -- (40) -- --
Cumulative Effect of a Change in
Accounting Principle After-tax -- -- -- (3) -- --
Net Income 171 527 (67.6) 747 1,381 (45.9)
Catastrophes After-tax 93 62 50.0 495 549 (9.8)
Combined Ratio before impacts of
catastrophes and restructuring charges
Impact of catastrophes
Impact of restructuring charges
Combined Ratio
100.4
2.5
0.1
103.0
96.5
1.7
0.4
98.6
3.9 pts
0.8 pts
(0.3) pts
4.4 pts
97.7
4.6
0.1
102.4
94.3
5.1
0.4
99.8
3.4 pts
(0.5) pts
(0.3) pts
2.6 pts

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Allstate Financial Highlights
Quarter Ended
September 30
Nine Months Ended
September 30
($ in millions)
Est.
2001
$
2000
$
Change
%
Est.
2001
$
2000
$
Change
%
Statutory Premiums and Deposits 2,491 3,338 (25.4) 8,294 9,580 (13.4)
Allstate Financial GAAP Revenues 1,257 1,304 (3.6) 3,684 3,614 1.9
Operating Income before
Restructuring Charges 135 132 2.3 384 396 (3.0)
Restructuring Charges After-tax 1 (1) -- 4 (9) (144.4)
Operating Income 134 133 0.8 380 405 (6.2)
Realized Capital (Losses)Gains
After-tax (46) 11 -- (133) (29) --
Cumulative Effect of a Change in
Accounting Principle After-tax -- -- -- (6) -- --
Net Income 88 144 (38.9) 241 376 (35.9)
Investments including Separate
Accounts 58,655 55,190 6.3 58,655 55,190 6.3
Allstate Insurance Company Street City, State Zip T 888.555.1234 F 888.555.1256 E someone@allstate.comAllstate Insurance Company Street City, State Zip T 888.555.1234 F 888.555.1256 E someone@allstate.comAllstate Insurance Company Street City, State Zip T 888.555.1234 F 888.555.1256 E someone@allstate.com